Best way to raise £500K

[FinanceBizWiz]

Hi everybody, I haven't posted here for a while.

I'm looking for suggestions/ideas on business finance options. I have a successful online business which makes a fairly good profit and the business is worth a few quid if we were to sell it but it's not really got any substantial assets, other than stock at approx £170K.

My business partner and I would like to diversify and have found a pub/restaurant for sale. It's £500K for the business and then the actual building is leased. Therefore, we need to come up with £500K to take the pub/restaurant on as a going concern. It has lots of space and potential for new business but I'm not entirely sure which is the best way to raise the £500K? There's no building we can borrow against (unless we use our houses, which we're not too keen on doing).

Does anyone have any pointers on the best way to raise £500K?

Thanks.

 

[IanSuth]

Have you run a pub/restaurant before ?

If not I think you may have found the best way to lose £500k, very few people make money out of them nowadays, are you able to step away from your other business and have it continue to make you money ? At least for a while you will need to eat sleep and breathe the pub

Why is it available, how is/was it doing, what staff did it have (it open at present who are staying and who are going) ? And many many more questions

 

[NickGrogan]

Seems like a really bad idea.

If you take over the business, you'll need new energy contracts. Assuming that you can find a supplier that will take you - most wont and many that do will want a security deposit.

You'll be looking at a 300+% increase on past rates, so a £20k annual bill will be closer to £60/70k.

Even if you ignore all the other price increases, problems with staff and other issues, this will kill the business.

 

[Mark T Jones]

If you are confident you'll put your house on the line (you'll have to give PGs, so ultimately your home will be at risk any way)

Personally I'd advise you not to be confident and to ask yourself some serious questions.

 

[japancool]

Perhaps it's worth a read of this thread:

The death of the pub? ?

We've had a request from a journalist who is looking to speak with a pub owner or manager about their thoughts on latest data that shows pub numbers have hit a record low in the UK. The journalist has a few specific questions they would like to ask you about how pubs should adapt to continue...

www.ukbusinessforums.co.uk

 

[MBE2017]

OP, if this pub restaurant has lots of space and potential, ask yourself why the previous owners did not use them? As Mark mentions above, it is most likely such a venture will require your personal guarantees on any finance, so your houses would most likely be at stake.

Do you think you would cope with say another lockdown if covid is resurgent? It is on the increase atm.

Not trying to talk you out of anything, but most people I have known going into the pub trade regretted it very quickly, after finding out they rarely get the time to spend at the bar playing at being the host.

 

[Financial-Modeller]

So you want to borrow 100% of what the vendor says its worth!

For many reasons, including those already mentioned, I suspect its worth substantially less than the vendor/agents asking price.

 

[MarkOnline]

Hi everybody, I haven't posted here for a while.

I'm looking for suggestions/ideas on business finance options. I have a successful online business which makes a fairly good profit and the business is worth a few quid if we were to sell it but it's not really got any substantial assets, other than stock at approx £170K.

My business partner and I would like to diversify and have found a pub/restaurant for sale. It's £500K for the business and then the actual building is leased. Therefore, we need to come up with £500K to take the pub/restaurant on as a going concern. It has lots of space and potential for new business but I'm not entirely sure which is the best way to raise the £500K? There's no building we can borrow against (unless we use our houses, which we're not too keen on doing).

Does anyone have any pointers on the best way to raise £500K?

Thanks.

IMO in this instance the best way to raise £500k is to have £500k but preferably £1million of your own money. This isnt a business to risk £500k of someone else's money, not unless your existing business was producing substantial profits which meant if you were to close the doors you could comfortably keep paying back your lender/lenders.

 

[Ian J]

Does anyone have any pointers on the best way to raise £500K?

You've been around here long enough to know that people would rather offer you the benefit of their wisdom than actually attempt to answer your question

 

[Mark T Jones]

You've been around here long enough to know that people would rather offer you the benefit of their wisdom than actually attempt to answer your question

You don't appear to have answered

 

[FinanceBizWiz]

Thank you to the 1 person that actually answered my question. I’ve suddenly remembered why I haven’t posted on here for so long. Too many people are keen to try and bring up the negatives and struggle to actually answer the question. Happened with my last 2 businesses that are now very successful. New owners should have named this UKTrollForums. Thanks and good night.

 

[Chris Ashdown]

OK I understand , you only want positive answers that agree with your plans, guess you are as you say on the wrong forum
If you are not willing to back yourself with your house, why should someone else take all the risk, would you lend me 500K

 

[MarkOnline]

Thank you to the 1 person that actually answered my question. I’ve suddenly remembered why I haven’t posted on here for so long. Too many people are keen to try and bring up the negatives and struggle to actually answer the question. Happened with my last 2 businesses that are now very successful. New owners should have named this UKTrollForums. Thanks and good night.

If they are now very successful why do you need to borrow all the asking price? Id put property up as security to borrow money, but my criteria for borrowing is obviously different to yours. You are not going to borrow all the money without substantial security, you will most probably not be able to borrow against the lease as I would imagine most lenders would view a lease as another liability rather than an asset. So you want to borrow to buy a business which has probably one of the highest failure rates and you have no previous experience either. Its not looking good really is it?
Business is about overcoming the negatives, reducing the impact of negative events in a businesses is,IMO, one of the major factors in building a long term successful business.

Good luck with the bank manager, he will be much more optimistic and understanding than anyone posting on here.

 

[Mark T Jones]

Ah yes, I can see the theme now, ask broad, imprecise questions and moan when you don't get precise answers

In this case, the precise answer on the information given, is that nobody is going to lend you the money.

Simple!

 

[Ian J]

You don't appear to have answered

That's because I don't know the answer and whilst I could offer opinions on the wisdom or not of buying a pub that isn't the question that he asked

 

[Fennaio]

3 years ago my wife and I looked into buying a pub/restaurant when a local one came on the market. It was more interest rather than intent tbh but we did some research and apparently it's quite common to go into a consortium for buying pubs and restaurants. Find 2 or 3 other people and split it. You split the risk and the work but obviously the profit too. 500k is a massive risk I would think on your own, certainly don't risk your house. 4 x 125k though is doable and sounds like you can cover your portion with the sale of your business. Obviously depends if you want to split it with other people. No where near my area of expertise but that's my input. Hope it works out.

 

[JEREMY HAWKE]

As none here gave the OP the answer that he wanted to hear I will help him

Yes you can borrow half a million easily and your business will be highly profitable
Hope this helps

 

[bodgitt&scarperLTD]

Thank you to the 1 person that actually answered my question. I’ve suddenly remembered why I haven’t posted on here for so long. Too many people are keen to try and bring up the negatives and struggle to actually answer the question. Happened with my last 2 businesses that are now very successful. New owners should have named this UKTrollForums. Thanks and good night.

Very weak username to personality correlation....

 

[Colourmy]

You don't appear to have answered

Because I think there was no more wisdom needed, you'd imparted most of yours on it!

 

[HouseReno]

SAVE SAVE SAVE and good luck

 

[fisicx]

SAVE SAVE SAVE and good luck

Why are you posting all over the place? Are you hoping to get to the magical 30 so you can linkdrop?

 

[Blackford Biz]

Hi everybody, I haven't posted here for a while.

I'm looking for suggestions/ideas on business finance options. I have a successful online business which makes a fairly good profit and the business is worth a few quid if we were to sell it but it's not really got any substantial assets, other than stock at approx £170K.

My business partner and I would like to diversify and have found a pub/restaurant for sale. It's £500K for the business and then the actual building is leased. Therefore, we need to come up with £500K to take the pub/restaurant on as a going concern. It has lots of space and potential for new business but I'm not entirely sure which is the best way to raise the £500K? There's no building we can borrow against (unless we use our houses, which we're not too keen on doing).

Does anyone have any pointers on the best way to raise £500K?

Thanks.

If there was ever a time to enter the hospitality market, it's not now. The next generation of covid is being manufactured, sorry mutating, as we speak. The initial question I'd have is how long would it take for me to get back my £500k given the risk of business downturn or upturn. Using your houses? Wow, that's risky unless you are positive of success.