How to Structure Finance for a Pub or Hotel Refurbishment
How to separate equipment, building work, professional fees and working capital when planning a pub or hotel refurbishment.
Refurbishment Equals Revenue
A refurbishment may improve capacity, customer experience or operating efficiency, but the commercial return is not automatic. The budget should connect each cost to a realistic operating outcome.
For the wider funding picture beyond refurbishment, see our hospitality finance guide.
Leased premises and non-recoverable building work can affect the available structures. Unsecured lending may avoid a charge over a specific business asset, but personal guarantees or other security may still apply.
Unsecured Refurbishment Finance
An unsecured business loan may be considered for decoration, building work, professional fees and other costs that do not create a separately fundable asset. Terms depend on the business, affordability and lender.
Rather than requiring property security, specialist lenders assess your application based on:
- Trading performance — your revenue history and consistency
- Card turnover — monthly card transaction data showing real customer spend
- Business fundamentals — time trading, management experience, and the viability of your refurbishment plans
Consistent trading evidence may help a lender assess the proposal, but it does not guarantee approval or remove the possibility of a personal guarantee.
Asset Finance for Kitchen and Bar Equipment
If the project includes identifiable kitchen equipment, refrigeration, coffee machines or EPOS systems, consider whether those items qualify for asset finance. Not every item or fit-out cost will qualify.
Smart operators split their refurbishment funding:
- Cosmetic work (décor, flooring, furniture, signage) — funded through an unsecured business loan
- Equipment (kitchen, bar, refrigeration, EPOS systems) — funded through asset finance
Splitting the requirement can make the purpose clearer, but the combined cost and repayments still need to be affordable. Read more about how to decide between asset finance and business loans.
Revenue-Based Repayment Options
Hospitality trading patterns vary by location and business model. A coastal hotel may depend heavily on warmer months, while a city pub may have different peaks.
Some specialist lenders offer revenue-based repayment structures that flex with your trading patterns:
- Pay more in your busy months when cash flow is strong
- Pay less in quieter periods when every pound matters
A variable structure may be worth comparing where cash flow is genuinely seasonal, but the total repayment and affordability still need to be assessed against fixed-payment alternatives.
Government-backed schemes
Government-backed schemes may be available through accredited lenders, subject to current scheme rules and normal lender assessment. A government guarantee is provided to the lender, not the borrower, and does not guarantee approval or remove the borrower's liability.
You can find out more about the scheme and eligibility at the British Business Bank website.
Planning Your Refurbishment Finance
Committing to contractors and timelines before the full project is costed and finance is confirmed can create avoidable pressure.
Instead:
- Confirm the complete budget — include equipment, works, fees, closure time and contingency
- Then commit to contractors — negotiate from a position of strength with confirmed funding
- Plan your timeline — schedule works around your quieter trading periods where possible
Before approaching a lender, compare the complete project cost with retained cash, supplier terms, landlord contributions and the expected commercial return.
Ready to understand your funding position?
Start with a Funding Readiness Review to see what lenders may look for, what to prepare and your practical next steps.