Non-trading pub mortgage

Mortgage on a pub that is not trading

Securing a pub mortgage without full trading accounts is still possible, but lenders will typically apply more conservative lending terms to manage risk. In these cases, borrowing is usually capped at around 65% loan-to-value (LTV) and assessed against a 90-day valuation, rather than a full going-concern valuation.

What does 65% LTV mean?

Loan-to-value (LTV) represents the percentage of the property’s value that can be borrowed. A 65% LTV limit means the lender will advance up to 65% of the valuer’s assessed figure. This approach is commonly used where detailed financial records are unavailable or insufficient to support lending based on trading performance.

What is a 90-day valuation?

A 90-day valuation estimates the price the pub could realistically achieve if sold within a restricted 90-day marketing period. It is a risk-adjusted valuation method designed to reflect a quicker sale scenario, rather than full open-market value. Lenders use this to ensure the loan remains recoverable in the event of default.

Why lenders use this structure

Without reliable accounts, lenders cannot assess affordability using EBITDA or sustainable profits. By limiting lending to 65% of a 90-day value, risk is mitigated by anchoring the loan to a conservative, saleable property value rather than business performance.

This structure provides a viable route for re-mortgaging a pub or purchasing where accounts are limited, but it directly impacts borrowing capacity and deposit requirements. Understanding how LTV caps and restricted valuations operate is essential when arranging commercial mortgages for pubs without standard financial documentation.