Quick answer
A pub or hotel loan is commercial property finance for a licensed venue, secured by the freehold and often by the going concern. Lenders weigh trading history, licence and gaming arrangements, the operator's experience and the strength of the location. Ownright Custom Finance arranges pub and hotel loans Australia-wide, including purchases, refinances and upgrade funding.
Key points
- Loans can cover freehold, business and licence together
- Trading performance carries as much weight as the building
- Operator experience matters to many lenders
- Refinance and upgrade funding are as common as purchases
- Suits
- Publicans, hotel investors, family operators and syndicates
- Security
- Freehold, going concern, plus guarantees
- Uses
- Purchase, refinance, renovation, buy-out
- Australia-wide
- Yes
How does pub and hotel finance work?
Pub and hotel finance is a commercial loan secured over a licensed venue. Unlike a standard shop or office, a pub is valued as much on what it earns as on the bricks. The lender is lending against a going concern: the building, the licence and the trade that comes through the doors.
That makes the application more like a business assessment than a plain property loan. It is also why the same venue can look very different to different lenders.
Who uses pub and hotel loans?
- Publicans buying their first or next venue
- Experienced operators expanding into a second site
- Investors buying freehold and leasing to an operator
- Families taking over a country pub with a bistro and accommodation
- Owners refinancing after a lender has changed its approach to licensed premises
- Syndicates and trusts buying a hotel together
What do lenders look at for a licensed venue?
Trading history. Usually several years of accounts showing turnover and profit, along with recent management figures. Lenders read the trend, not just the latest year.
The mix of income. Bar, food, accommodation, gaming where applicable, and function trade. A venue that relies on one stream is read differently from a balanced one.
The operator. Experience, licence history and the capacity to run the venue. Lenders often like to see a proven operator, or a manager with a track record.
The location. Tourism, local population, competition and the venue’s place in the community.
Security and structure. Freehold, going concern, any lease arrangements and the entity doing the borrowing. See company and trust borrowing.
The licence. Current, in good standing and transferable in the way the deal needs. Each state and territory regulates this differently, so the timetable can vary.
Freehold, leasehold or going concern?
| Arrangement | What is financed | What lenders often focus on |
|---|---|---|
| Freehold and business together | Property plus the trading business | Earnings, operator, valuation of both |
| Freehold only, leased to operator | The building and land | Lease terms, tenant strength, rent |
| Leasehold operator | Business purchase and fit-out | Lease length, trading, guarantees |
| Refinance | Existing debt replaced | Performance since the original loan |
If the venue is mainly accommodation and holiday trade, our page on tourism and caravan park loans may be useful alongside this one.
How does Ownright approach pub and hotel loans?
We start with the story behind the numbers. A pub with a dip in one year because of a refurbishment is a different deal from one in genuine decline, and lenders respond to that difference when it is explained properly. Trevor Scott and the team have spent decades arranging finance for deals that did not fit a standard box, and we use that experience to find lenders who understand the sector.
We work Australia-wide, from metro hotels to regional pubs, and we can also look at short-term options when a settlement date or a lender’s decision leaves you short on time. You can tell us about your venue and we will say what looks realistic.
An illustrative scenario
An experienced publican wants to buy a second regional hotel. The seller wants a quick settlement, and the current lender will not stretch further. The buyer’s first venue has solid trading and could support a combined structure.
Lenders might look at the two venues together, at a new facility over the second property, or at a bridging-style solution while the first loan is restructured. The right answer depends on figures, security and lender appetite. This scenario is illustrative only.
Mistakes to avoid
- Contracting to buy before finance appetite for the venue has been tested
- Presenting accounts that are months out of date
- Forgetting how long a licence transfer can take
- Ignoring the lease terms on any leasehold element
- Asking one lender for everything when a split structure might work better
What to have ready
- Three years of financials and tax returns for the venue and operator
- Recent management accounts and BAS
- The contract of sale, lease or licence details
- A brief operator profile and experience summary
- Asset and liability statement for owners and guarantors
- Any plans for works or upgrades
Our guides on how commercial property loans work and commercial LVR and valuations explain the lender’s thinking in more detail. A commercial loan refinance is also worth discussing if your current lender has signalled a change.
What makes a pub loan different from other commercial lending?
Pubs earn from several streams at once: drinks, food, accommodation, gaming where the venue has it, and events. That diversity helps in some ways and complicates others, because each stream carries its own risk and its own regulation. A lender’s credit team will often build separate views of each stream before forming a single opinion.
Staffing and management also matter. Venues are labour-intensive, and the stability of the manager or licensee is part of the lender’s comfort. Where the operator is also the owner, lenders look at personal commitment. Where a manager is employed, they look at how that person is incentivised and what happens if they leave.
How do lenders treat country and regional pubs?
Regional pubs are often the heart of a community, and some lenders like that. Others are wary of small populations, seasonal swings or distance from head office. Strong accommodation trade, steady local custom or tourist traffic can offset concerns. Weak trading records or ageing buildings tend to need extra explanation.
We work Australia-wide and routinely see regional hospitality deals that mainstream credit policy handles awkwardly. Explaining the local economy, the venue’s role and the upside in a short written summary often changes how a deal is read. Our hospitality business loans page covers the operating side of the same industries.
Can I use a pub loan for renovations or a change of concept?
Often yes, either by borrowing more against the existing property or by raising a separate facility. Lenders want to see what the works are, what they cost, how long the venue will be closed or restricted and how the result lifts earnings. A phased plan that keeps the venue trading is usually easier to fund than a full shutdown.
Where the plan is substantial, we may look at property refurbishment finance or a short-term facility until works finish and a long-term refinance can follow. The structure depends on the lender, the security and the paperwork available.
What if a pub is in difficulty?
Venues hit trouble for many reasons: a lease renewal, a change in trading hours, a nearby competitor or simply a rough year. If a lender has issued a default notice or a demand, time matters. Options may include refinancing to a more flexible lender, a short-term facility while the numbers recover or restructuring the debt across assets. We are straightforward about what is realistic, and we move early. Our difficult loans page explains how we think about hard cases.
Looking for finance for a pub or hotel?
Sounds like you’re after a pub or hotel loan that fits a licensed venue. We’re the lending experts in hospitality property finance, so click the button below and see if you qualify.
How it works, step by step
- 1
Step 1
Share the venue details, trading history and what you want to achieve.
- 2
Step 2
We position the deal around the numbers, licence and operator profile.
- 3
Step 3
We approach lenders with an appetite for licensed venues in that location.
- 4
Step 4
Valuation, documents and settlement are coordinated through to funding.
Frequently asked questions
How do lenders value a pub or hotel?
Usually on a mix of the property value and the trading earnings, since a licensed venue is worth what it can earn. Valuers look at turnover, profit, lease or freehold position, gaming and food and beverage mix. Accounts that are tidy and up to date make the valuation smoother.
Can I buy a pub with no hospitality experience?
It can be harder, as many lenders like to see an operator with a track record. Options include bringing in an experienced manager, buying with a partner who has runs on the board, or choosing a venue that suits your skills. We discuss realistic lender appetite before you commit.
Does the liquor licence affect the loan?
Yes. A lender will want to confirm the licence is current, can transfer or be held by the new operator, and that conditions are being met. Licensing is run by each state or territory regulator, so timing and process differ. We factor this into the settlement timetable.
Can I refinance a pub loan if my current lender is pulling back?
Often there is a path. Lenders reassess licensed venues when earnings dip, leases change or the sector appetite shifts. A refinance to another lender, or a short-term facility while you restore trading figures, may be possible. Talk to us early, as options narrow when deadlines close in.
Can a trust or company buy a hotel?
Yes, and many do, often with a property-owning entity separate from the operating company. Lenders look at how rent and profit flow between the two. Our page on company and trust borrowing covers the structures, and we can map yours before approaching lenders.
Is finance available for pub renovations or a new kitchen?
Sometimes, either as a top-up on existing security or as separate equipment or property finance. Lenders will want to see how the works lift trading. We can look at which structure suits, including staged drawdowns where works happen in phases.