Loan Amount: £350k
Loan Type: Public house purchase
Security: Freehold on the commercial property being acquired
Reparo provided £350k to enable an experienced hospitality entrepreneur to acquire a new venue.
The Challenge
Reparo were approached by a broker looking to secure funding for a hospitality entrepreneur who had spotted an opportunity to purchase a new country pub to add to their portfolio.
The broker had found significant challenges in securing funding.
Many lenders were deterred by the current challenges facing the sector. With COVID-19 measures severely affecting the hospitality businesses, there was a reluctance to lend.
Lenders were also concerned that the pub being acquired had been closed – it begged the question: why did the previous owners not make the business work?
The challenge was to look beyond these issues and take a view on the entrepreneur and the specific business plan. Here’s how Reparo approached the loan.
The Approach
The first step was for one of the Reparo team to visit the site and meet with the entrepreneur.
It quickly became clear the borrower was an experienced hospitality operator with an excellent business plan for the new pub. The team were able to review several other successful hospitality sites the entrepreneur was currently running. The new site was going to be an excellent addition to a well-functioning portfolio.
The site also had excellent potential, and the entrepreneur explained how the business would reach profitability – even during a pandemic. Experience lending to hospitality businesses meant the Reparo team could understand the proposition and critically review the financial plan.
This meant Reparo were able to feel comfortable with several factors that deterred other lenders.
Reparo v Other Lenders
| Lending Consideration | Other Lenders | Reparo Finance |
| Sector | Wary of companies operating in sectors exposed to COVID-19 | Willing to review each business on a case-by-case basis and understand the plans to mitigate sector risk |
| No Accounts on the Target Venue | Unable to prove serviceability of repayments | Willing to review the business plan and use sector knowledge to evaluate serviceability |
| Viability of Site | Worried that the previous owners had been unsuccessful | More focused on how the new owners planned to run the business |
Andrew Ward, Managing Director at Reparo Finance, said:
“This was a classic case of a strong business unable to access funding because lenders didn’t evaluate the proposition. We reviewed the business case and could see very quickly that it was solid and the owners had a plan to grow the business and navigate the uncertainty of the current pandemic.”
To discuss a loan please get in touch on contact@reparofinance.co.uk or 0161 451 5710