Pub owners dip into personal savings to keep businesses afloat

pub & bar

By BigHospitality

- Last updated on GMT

Pub owners dip into personal savings to keep businesses afloat

Related tags: Pub & bar, Coronavirus

Pub and bar owners lent their own businesses £138m to stay afloat during the pandemic, according to research from Growthdeck.

The study by the private equity investment firm shows 1,730 UK pubs and bar companies have run so short of cash and other finance that their directors have had to make loans to them from their own personal resources.

Many of those loans are for more than £200,000, despite Government-backed lending schemes such as CBILS and BBLS.

Growthdeck says there was scope for pubs and bars to see a profitable rebound, provided they have access to funds to enable them to grow.

“The pub and bar sector has endured a difficult 18 months," says Steve Talbot, investment director at Growthdeck.

"Many owners have had to use their own money to stay in business as traditional funding options have been restricted.

“However, the hospitality sector now faces a unique opportunity. The impact of the pandemic on the high street has led to an excess of prime sites at attractive rents and much less onerous lease terms.

“A lot of competition has been removed from the industry and the prospect of a bounce back in trading for the right concepts looks strong.”

In the summer, Growthdeck closed £4.3m of funding for new bar group Maven Leisure, completing the investment firm’s largest single raise.

“Pub and bar companies with access to the right finance have an excellent opportunity to expand and grow," Talbot adds.

"Investors should not underestimate the considerable growth potential of the hospitality sector.”

Related topics: Trends & Reports, Pub & Bar

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