Financing a Freehold Pub or Hotel With Gaming Entitlements
Pub and Hotel Finance: Gaming Venues | Switchboard Finance
Accommodation Finance
Freehold Pubs · Gaming Entitlements · Going Concern
Financing a Freehold Pub or Hotel With Gaming Entitlements
A freehold pub or hotel is not priced like a corner shop. The land and the building matter, but lenders read the trade and the gaming entitlements as the real asset. Here is how a freehold venue with gaming is actually valued and financed.
Quick Answer
Lenders treat a freehold pub or hotel as a going concern, valuing the property and the trading business together, with the gaming entitlements counted as a separate asset. What you can borrow on pub and hotel finance turns on tenure, the licence, and the security behind the deal.
Why a freehold pub is not priced like a shop
Most buyers size a freehold pub the way they would size a corner shop, land plus building, with the business treated as an afterthought. A lender does the reverse. It reads the licence, the trade and the gaming entitlements, a separately valued, tradeable asset, as the real value, and treats the land and the building as the floor under the deal. The pub is assessed as a going concern, the property and the trading business together as one asset, not as bare real estate.
The practical effect is what matters: a freehold going concern will not value like a retail shopfront, and a lender will not treat it as one. Two pubs on near-identical corners can value very differently once you read the trade and the licence behind each one. For a fuller primer on the concept, our going concern explainer walks through how buyers should read it before they make an offer.
What lenders actually look at first
What lenders actually look at first on a licensed venue is the going concern valuation, not the land value on its own. From a credit assessor's point of view, the licence and the gaming entitlements are the part of the file that does the real work, because they drive the earnings the loan is repaid from.
A specialist valuer assesses the venue as an operating business, so the trade, the tenure and the gaming all sit inside the one number, alongside the bricks. The market behind those valuations has been moving, which is worth a moment before we get to how far the gearing stretches.
How far the gearing stretches on a freehold pub
How far the gearing stretches depends mostly on tenure and whether the venue holds gaming. As a market-standard guide, a freehold pub with gaming typically gears to around 65% of value, indicative and varies by lender, while a freehold without gaming sits nearer 50%, illustrative. A leasehold venue is financed against the lease rather than the dirt, so the loan is usually capped inside the remaining lease term.
Where a borrower brings extra property to the deal, supporting security can lift effective gearing toward 100%, illustrative. Push past the comfortable bands and the file tends to change hands: single security above roughly 70% LVR usually needs a non-bank or Tier-2 specialist, indicative, rather than a major bank.
Where the deal works
- Freehold title with the gaming entitlements held inside the venue
- A recent going concern valuation from a specialist valuer
- Demonstrated trade and occupancy the earnings can be read from
- Supporting security available to ease the gearing
- Self-employed buyer with licensed-venue experience
Where the deal stalls
- Leasehold with a short remaining term and no freehold fallback
- Gaming entitlements being sold separately from the venue
- Thin or unproven trading figures behind the asking price
- Single security pushed well above the comfortable LVR band
- Buyer with no venue track record and no supporting security
Getting the deposit and the structure right
On a freehold pub, the deposit follows the gearing band: the stronger the tenure and the licence, the less cash you bring to settlement. Because a going concern blends property and business, the structure matters as much as the headline price, and a borrower who brings commercial property as supporting security can often reshape the deposit. Our guide to buying a pub walks through how deposit and tenure interact.
Gaming entitlements are regulated state by state, and how they are held and transferred sits with bodies such as Liquor and Gaming NSW, so the licence detail belongs in the file early rather than late. If you are weighing a freehold venue, the accommodation finance hub and our property lending hub set out the wider toolkit, and a broker can map the structure with you before you commit to a price.
A freehold pub or hotel is financed as a going concern, where the property, the trade and the gaming entitlements are valued as one asset. Tenure and the licence set the gearing band, supporting security can stretch it, and once a single security pushes past the comfortable LVR the deal moves from the major banks to non-bank and Tier-2 specialists.
Key takeaway: treat the licence and the gaming entitlements as the asset, get a specialist going concern valuation early, and settle the security structure before you fix the deposit.Frequently Asked Questions
The deposit you need to buy a freehold pub depends on the gearing band the lender applies, which is driven by tenure and whether the venue holds gaming. As a market-standard guide, a freehold pub with gaming typically gears to around 65% of value, indicative and varies by lender, so the balance is the deposit and costs you fund before any supporting security is considered. Bringing extra property as supporting security can lift effective gearing and reduce the cash deposit. Our going concern entry explains why the business, not just the building, drives that number.
Gaming entitlements are valued as a separate, tradeable asset alongside the pub itself, which is why a licensed venue is not priced like a plain commercial building. Lenders read the entitlements as part of the going concern, because they help drive the trade the loan is repaid from. Where entitlements are being sold away from the venue, the security weakens and the deal gets harder to fund. See our going concern explainer for how the pieces fit together.
Financing a freehold pub without gaming is possible, but the gearing usually sits lower because a key earnings driver is missing. A freehold without gaming sits nearer 50%, illustrative, against a freehold with gaming that may reach around 65%, so you typically bring a larger deposit. A freehold going concern still carries real value in the land, the building and the trade, and supporting security can help. A broker can test where a no-gaming venue lands with non-bank and specialist funders.
The difference between freehold and leasehold pub finance is what secures the loan: freehold lends against the property and business together, while leasehold lends against the lease and the business only. Because a leasehold has no land to fall back on, the loan term is usually capped inside the remaining lease and the gearing is read more cautiously. Freehold venues with gaming generally support stronger borrowing than leasehold of the same trade. The right structure depends on tenure, lease length and the licence.
You do not always need a specialist lender to buy a hotel with gaming, but you often will once the loan pushes past the comfortable LVR band. Single security above roughly 70% LVR usually needs a non-bank or Tier-2 specialist, indicative, rather than a major bank, particularly where the trade or tenure is less conventional. Strong tenure, a clean going concern valuation and the right pub and hotel finance structure can keep a deal with mainstream funders. A broker can match the venue to the lender most likely to fund it.
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