Accommodation Finance for Pubs, Hotels and Big Freehold Venues
Licensed Venue Accommodation Finance | Switchboard Finance
Accommodation Finance
Accommodation Finance · Going Concern · Licensed Venues
Accommodation Finance for Pubs, Hotels and Big Freehold Venues
A licensed venue is not financed once. Across its life it raises money in several different ways, and each one turns on the same idea: the going concern, the property and the trading business valued as one asset.
Quick Answer
Accommodation finance is business-purpose lending for licensed and accommodation venues, secured on the going concern, the property and the trading business combined. It spans the whole life of a venue, from buying in to stepping back. Explore the full lane on our accommodation finance hub.
What accommodation finance actually means
Freehold pubs and hotels, motels, caravan parks and management rights all borrow against the same thing: a trading business tied to a site, not the bricks on their own. That is the ground accommodation finance covers, and it runs on a single principle, the going concern is the asset. In practice it is going concern lending, the property and the business read as one unit, written for licensed and accommodation venues rather than for bare commercial premises. A building with no trade is just real estate, but a venue with a licence, a customer base and a set of accounts is something a lender can value and lend against together.
That is the difference that trips up owners who expect a venue to be priced like a shopfront. When the trade is part of the security, a lender reads the venue's earnings alongside the bricks, and the structure of the deal follows the structure of the business. Australia's accommodation and licensed-venue sector is large and spread well beyond the capital cities, as the Australian Bureau of Statistics tourism and transport data shows, and that regional spread is exactly why specialist structures exist. You can see every product in the lane on our accommodation finance hub, anchored by the same going concern idea throughout.
The finance moments in a licensed venue's life
A licensed venue raises money at several distinct moments, and accommodation finance is really the discipline of matching the right structure to each one. The bricks barely change across these moments, but the way the going concern is read changes a great deal, which is why one operator can hold five different facilities over the years and never finance the venue the same way twice.
Buying in. The first move is usually acquiring a freehold pub or hotel, often with gaming attached. Here the lender weighs the tenure and the freehold going concern together, and gaming entitlements are treated as a separately valued, tradeable asset. We walk through that lender read in financing a freehold pub or hotel with gaming entitlements, which feeds directly into our pub and hotel finance page.
Carrying a sale. When a multi-million venue changes hands, the buyer is often short the final slice, and the seller carries it. That is vendor finance, and how it sits behind a senior lender is covered in how vendor finance works on a multi-million venue sale.
The property behind the trade. Where the deal is led by the real estate, a commercial property loan is written against the going concern valuation rather than a bare-bricks figure. The mechanics, including how an instructed valuer works off adjusted net profit, are set out in commercial property loans against a going concern valuation.
The operator's own home. Publicans and venue owners draw an income that mostly sits inside the business, which makes a standard home loan awkward. A one doc home loan reads that self-employed income differently, as explained in what a one doc lender reads when your income is a pub.
Stepping back. The last moment, and the one most owners underplan, is succession and equity release, where the value built up in the venue is refinanced rather than realised by a full sale. That is the spine the whole vertical is built around, and it is where this guide ends.
Freehold or leasehold, and how the going concern is valued
Freehold and leasehold tenure are financed very differently, because one offers the land as security and the other offers only the right to trade from it. A freehold going concern couples the real estate and the business in a single valuation, while a leasehold interest is assessed against the lease itself, usually with a deed of consent from the landlord and a term capped inside the remaining lease. The same trade can support very different gearing depending on which of these two you hold.
Across both, the working principle is education-first, market-standard gearing, indicative and varies by lender: how far a lender will go depends on tenure, on whether gaming sits inside the security, and on whether there is supporting security to lean on. We keep the specific bands on the spoke pages rather than here, because they move by venue type. Motels and caravan parks follow their own going-concern logic on our motel finance and caravan park finance pages, and management rights are financed differently again through management rights finance.
What makes a venue deal move faster
- Clean going concern accounts that separate venue earnings from owner wages
- Gaming entitlements documented, current and clearly held
- Tenure that is simple, either a freehold title or a long lease with landlord consent
- An operator with a real hospitality track record
- Supporting security available to lift the structure
What slows a venue deal down
- Trading figures that blend owner drawings with the venue's actual profit
- A short or unconsented lease with little term left
- Gaming entitlements that are unverified or in transition
- No supporting security paired with a request above market-standard gearing
- An exit plan that quietly assumes bridging will be available
Succession and equity release, the move most owners underplan
Succession and equity release is the finance moment most licensed-venue owners leave too late, and it is the one the whole vertical is built around. Rather than selling outright, an owner can refinance the value sitting in the going concern to fund a partial exit, hand the venue to a successor, or release capital for the next acquisition, all while the trade and the team stay in place. This is handled through equity release and refinance, and it pairs naturally with a vendor finance arrangement when a successor or business partner is buying in over time.
One structural point matters here, because owners ask for it by name: no bridging, transition debt routes to caveat or private lending. Switchboard does not offer bridging finance, so where the timing between buying and selling is tight, that short-term need is met through caveat or private lending secured against the going concern or a supporting asset, then cleared on settlement. Timing is the other lever: an end-of-financial-year or new financial year handover changes how the going concern reads, so the forward year and the settlement date are worth planning around well before contracts are signed.
Accommodation finance is one idea applied across a venue's whole life: the going concern is the asset, and every facility, from buying a freehold pub to releasing equity for a successor, is a different way of lending against the property and the business combined. Match the finance moment to the right structure early and the going concern does the heavy lifting at every stage; leave it late and the same deal gets harder and slower.
Key takeaway: plan the structure around the finance moment, not the other way round, and let the going concern carry the deal.Frequently Asked Questions
Accommodation finance is business-purpose lending for licensed and accommodation venues, secured on the going concern, the property and the trading business combined. It covers freehold pubs and hotels, motels, caravan parks and management rights, rather than treating the building as a bare commercial premises. Because the trade is part of the security, a lender reads the venue's earnings alongside the bricks. You can see the whole lane on our accommodation finance hub.
Lenders value a pub, hotel or motel on a going concern basis, where an instructed valuer assesses the property and the business as one asset rather than pricing the real estate alone. The trade, the occupancy and any gaming entitlements feed the assessment, which is why two venues with similar buildings can carry very different values. For the valuation mechanics in detail, see our guide to commercial property loans against a going concern valuation.
Financing a leasehold venue is possible, and it is assessed against the lease rather than the land, usually with a deed of consent from the landlord and a term capped inside the remaining lease. A freehold going concern and a leasehold interest are read very differently, because one offers the land as security and the other offers the right to trade from it. Gearing on leasehold is typically more conservative, indicative and varies by lender.
Equity release on an accommodation business is a refinance that draws out part of the value built up in the going concern, often to fund a partial exit, a successor handover or the next acquisition. It uses the existing venue as security rather than selling it, so the trade and the team stay in place. Owners commonly pair equity release and refinance with a vendor finance arrangement when bringing in a successor or partner.
Switchboard does not offer bridging finance, so where an owner needs to move before a sale settles, that transition debt routes to caveat or private lending instead. These are short-term, business-purpose facilities secured against the going concern or a supporting asset, and they clear once the sale or refinance completes. Speak to a broker early, because the exit plan shapes which tool fits.
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