Funding that flexes with your covers, not against them

Hospitality is not one sector to a lender, it is four, and the panel thins as you move across it. 31 of our lenders will lend against leisure premises, 28 against a takeaway, 29 against healthcare and only 20 against a pub (checked September 2026). Outside farms and petrol stations, pubs are the tightest sector on our panel. Anyone telling you a freehouse is as easy to fund as a coffee shop has not tried recently.

For the trading business rather than the building, 20 of our lenders fund restaurant and bar equipment and 22 fund a fit-out. Cellar cooling, a new kitchen line and an EPOS rollout all sit comfortably in asset finance, where the kit carries the security rather than the balance sheet.

Age of business does more damage here than credit history. 21 of our 55 unsecured lenders will look at a business trading under a year, against 24 that accept minor adverse credit older than 24 months. A first site in month four is a harder case than a third site with a county court judgment behind it.

Buying the freehold is where hospitality funding gets specific, because a trading property is valued twice. There is the market value with the business in it, and the vacant possession value with the business gone. Allica Bank publishes an owner-occupied hotel ladder measured against vacant possession value rather than market value, running from 65% up to 100% of vacant possession, with a personal guarantee required above 70% and the 100% tier reserved for branded hotels over £1.5m and capped at 65% of market value (27 April 2026 guide, read 7 September 2026).

Read that ladder carefully and you can see what a lender is actually pricing: the risk that it ends up owning an empty building. Every published rate in that guide is also quoted inclusive of Allica's 0.50% current account discount, which is conditional on opening an account with them and routing half your annual turnover through it for five years. A borrower who will not move their banking pays 0.50% more than the advertised figure. Nobody puts that in a headline.

Across our whole commercial mortgage panel, published rates at 70% loan to value run 4.6% to 11.4% with a median of 7.3%, and the median maximum loan to value is 75% (checked September 2026). Those are product ceilings across 45 lenders, not a quote.

Most hospitality enquiries are not about buildings at all. They are about a quarter where the VAT bill, the rent day and a broken chiller arrived in the same fortnight. At £25,000 unsecured, 36 lenders have a product covering it over terms of 1 to 72 months, with published floors from 4.1% and a median floor of 19.2% (checked September 2026).

The single change that improves a hospitality offer most costs nothing. Send twelve months of statements, not three, and label the seasonal weeks. A lender reading a February window sees a business in trouble. The same lender reading a full year sees a business with a summer. We put that note on the file ourselves, and the lender still makes its own decision.

The ONS counted 9,945 VAT or PAYE registered enterprises under hotels and similar accommodation in the UK at March 2025, inside 176,690 accommodation and food service enterprises in total, up from 173,515 in 2024 (UK business: activity, size and location 2025). The House of Commons Library briefing of 10 February 2026 puts 99.6% of hospitality businesses in the SME bracket on the same ONS data, and UKHospitality describes the sector as the third largest employer in the country with 3.6 million people working in it. Both were read on 9 September 2026.

Business rates in England changed on 1 April 2026 and the change cuts both ways for accommodation. Hotels and bed and breakfasts are on the gov.uk list of qualifying uses, so a property with a rateable value under £51,000 pays 38.2p in the pound and one between £51,000 and £499,999 pays 43p, each 5p below the equivalent standard multiplier, replacing the 40% relief of 2025/26 and its £110,000 cap per business. A hotel rated at £500,000 or above is outside that scheme and pays a higher multiplier set 2.8p above the standard one (guidance updated 30 March 2026, factsheet updated 30 January 2026). A lender reading a 2026/27 forecast will expect the rates line to have moved in one direction or the other.