Raising Finance for Business

pyrorus

Firstly sorry if this is the wrong board, please move it if it is.

I've been an Employee at a pub for a number of years, I work as the landlords assistant Manager.

The Landlord wants to retire and has offered that I can take over the Business, but I need to raise the £35000 to buy him out of the lease (30 years remaining on it). This is my problem.

Personally banks won't touch me with a barge pole, I have had debt problems in the past which I have negotiated reduce payments with and at my current repayment rate have about 10 years left. Also banks are weary of pubs in general in this current climate.

I can however prove that the pub in its current state is making a gross profit of £50-£60k a year (in its heyday (before crunch) it was around the £100k mark, its dropped to £50 and climbed back to £60) which would not only allow me to easily make a repayment of a loan but also clear my existing personal debts and allow me to still life reasonably.

I'm sure you can see why a bank would not want to loan me any money and I completely understand it, I have no family and friends that can lend me that much, so was wondering if anyone on here had any idea how I could raise the money.

Tixy

Seems unlikely you will find a commercial lender in your position.

Will the existing landlord be prepared for you to pay the buyout figure to him over time out of the future profits of the business? Or at least a proportion of it? It might be easier to raise say half the figure than the whole amount. You say family cannot lend you that much - is there a family member who might be willing to join you in the venture and put up some of the money? Would the brewery that the pub uses be prepared to give you a loan in return for some deal with them (exclusivity or something)?

Might be worth a quick look on the business link website funding section to see if there is any other suggestions on there.

Is buying out the lease on this pub the cheapest way of starting such a business? have you looked at other pubs in the area such as brewery tied pubs to see if there are cheaper options.

pyrorus

Firstly Thank you for replying,

Tixy wrote: »

Seems unlikely you will find a commercial lender in your position.

Thats kinda what I thought

Tixy wrote: »

Will the existing landlord be prepared for you to pay the buyout figure to him over time out of the future profits of the business? Or at least a proportion of it?

No I had already thought of that but he wants out, also wants to invest the money into a new house, he's losing his lol.

Tixy wrote: »

is there a family member who might be willing to join you in the venture and put up some of the money?

No already asked them if (A) they want to go into partnership aor (B) lend me the money.

Tixy wrote: »

Would the brewery that the pub uses be prepared to give you a loan in return for some deal with them (exclusivity or something)?

I have looked into brewery loans, but there seems to be a lot of negative attitudes towards them and a lot of trade publications recommend against them.

Also the brewery loans tend to be for smaller amounts, not that big a figure.

Tixy wrote: »

Might be worth a quick look on the business link website funding section to see if there is any other suggestions on there.

I'll look over there now.

Tixy wrote: »

Is buying out the lease on this pub the cheapest way of starting such a business? have you looked at other pubs in the area such as brewery tied pubs to see if there are cheaper options.

The cheapest way into a pub is either a management position, where basically your just an employee or some Brewery's do entry level ie Marstons do one with about £5k investment, most of these have catches, and I will probably consider one of these if I really fail getting the one I want.

Thanks for the reply and I think your original line is the best I'm gonna get ie no . lol, Least I attempted to get it, if I never try I'll never get anywhere.