Pub Conversion Finance

Charterbank provides fast reliable finance for pub conversions across England and South Wales.

Pub conversions offer many development opportunities. For example, when converting a public house, you may be considering how to make better use of the property and its land, looking to streamline what’s already there and cleverly divide the available space. Or you may have made a speculative purchase for a complete conversion and be ready to start.

We know that every pub, project and customer is different. The very nature of this type of building can present specific challenges, costs can be hard to predict exactly and additional funds or time may be required. Funding such a conversion needs a lender that understands the process inside out.

As a Principal Lender specialising in property finance, we are able to offer bespoke finance for all types and sizes of pub conversions, including loan facilities for first time developers. Charterbank only provide loan facilities for business purposes (such as build to sell, build to let or to trade as-is). Loan facilities are available to individuals, sole traders and limited companies including SPVs, with no personal guarantees typically required.

How does development finance for a pub conversion work?

This type of finance usually works by securing the loan facility against the pub or land being developed. However, alternative land or property can be offered as security when the loan is being arranged.

You can apply in your personal name or a company (which can be a new or existing company). Typically, 50–60% (net) of the site/property value can be advanced at the start of the loan with additional stage payments available throughout the build.

Products are available to fund up to 100% of the development costs. Stage payments are pre-determined at offer stage for ease of budgeting. However, these can be varied if the build programme or budget alters.

Stage payments are typically made within 1 working day of the in-house site inspection having been carried out. Payments are made without the need for an external Quantity Surveyor or Monitoring Surveyor. No specific structural warranty provider or supervising Architect is imposed, leaving the developer free to choose the provider that best suits their needs.

Charterbank is dedicated to providing an exceptionally high level of service and is renowned for its speed, integrity and reliability amongst customers and introducers alike. The management team enjoy a wealth of property, development and commercial finance experience.

Examples of pub conversion projects

While lending throughout the South West and Southern half of the UK we are seeing public houses and the surrounding land develop and diversify, with available space used more efficiently.

We have seen a rise in trading areas being reduced in size to allow for part conversions, as well as car parks being developed – all of which we have a particular appetite for funding.

Recent cases considered or supported:

› £130,000 bridging loan to purchase a pub with potential for residential conversion in Bristol. A loan was sought by a property developer to purchase a vacant edge of town pub with potential to convert into 2 houses.

› £50,000 development top-up facility to complete the final phase of works within a converted pub. The former pub in Birmingham had been partially converted to residential (comprising 4 flats) which were to be completed, let and held as a long-term investment.

› £350,000 development facility for a 4 unit scheme in West Cornwall comprising part conversion, part new build for onward sale once completed.

› £175,000 development facility for the conversion of a former skittle alley adjacent to a trading pub in Somerset. The facility was to fund the entire development of a single unit scheme to be sold or let.

› £75,000 heavy refurbishment facility for the conversion of the upper parts of a trading pub into HMO accommodation in Plymouth, Devon. The landlord/developer had previously purchased the property without finance and was seeking to raise capital to carry out works.