Buying a Pub; the finances
From a potential purchasers viewpoint the acquisition of your own business by finding a suitable pub is still one of the most popular routes into self employment.
From a banks viewpoint it remains one of their least favoured sectors.
Why is this; because statistically, more businesses of this type go wrong, than in many other sectors, and hence expose the bank ( and more importantly, the purchaser, to risk of losing their money).
Why should this be?
Tight profit margins
Applicants not suitable to run business.
Sector vulnerable to economic changes
Regulatory/ and social pressures; eg smoking ban; drink drive rules
From a bankers stand they look for following parameters
Max loan on freehold pub; 60% loan to value of pub;
3 years good historic accounts; projections at present defitely out of favour
Sector experience; run a business before? if so what/where/ how did it do?
Robust business plan
Second way out; ie other than forced sale of business if things dont work out.
Having what looks like, pouring cold water on anyone contemplating going in this direction, there are still good opportunities for the right candidate looking at the right business, at the right price.