<
p>Background
David W. has spent his life working in the pub trade, working his way up from being a glass collector in his youth to taking over as the licensee of his own pub in 2008. When that pub was sold in 2011 by Punch Taverns he decided that he and his wife Anne would look for a pub to buy in order to realise a long held ambition.
The deal
They approached us in 2013 for a £95k loan against the £155k purchase price for the pub in Denton, Stockport. The high street banks weren’t comfortable lending because the pub’s accounts showed it had been making a loss.
Our specialist knowledge of the pub sector allowed us to review the business plan provided by David and Anne.
We saw that the expectations of turning a profit were realistic given the barrelage achieved at the pub previously and indeed that the reason for its previous struggles had been a high rent and the beer tie preventing any price reductions to compete locally.
Profit and loss projections seemed achievable and interest payments could be made without putting undue strain.
Given this and David’s local knowledge and experience (the pub he previously ran was ½ a mile away), we felt comfortable lending for 12 months and the purchase was completed in September 2013.
Exit
It ended up being a great deal for everyone involved, interest payments were made throughout and once they had accounts showing the pub’s profitability they were able to refinance through a high street bank with the help of an established leisure focused broker.
Review
A lot of short term lenders won’t look at the leisure sector but we believe it is a strong sector as long as you know what you’re looking for, with good operators like David and Anne and a good site you can achieve a lot.
High street banks aren’t lending to SMEs as they used to and someone has to bridge that gap in the market and help people get their businesses off the ground. At Ortus, we think we can be the ones to fill that void.
Reflecting on the deal, David W said: ‘Ortus helped me get my business off the ground when no one else would.’
David W. has spent his life working in the pub trade, working his way up from being a glass collector in his youth to taking over as the licensee of his own pub in 2008.
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