Hospitality business finance
Restaurants, pubs, cafés, gastropubs, hotels and B&Bs. Strong card-machine flow makes MCA the dominant product. Seasonal cashflow patterns and capex cycles drive product mix. A common decline reason in this sector is sub-12-month trading. Lenders to consider for hospitality include Capify, 365 Business Finance, iwoca.
Want ranked lender picks instead of the sector overview? See our best UK business loans for hospitality →
Which finance fits a hospitality business
Restaurants, pubs, cafes, gastropubs, hotels and B&Bs typically take card payments daily, which makes a merchant cash advance the dominant product: it advances against card flow and is repaid as a share of takings, so payments rise and fall with trade rather than sitting as a fixed monthly burden. Kitchen and restaurant equipment finance spreads the cost of fit-out and refurbishment, a VAT loan smooths the quarterly bill after a busy period, and a commercial mortgage or bridging facility supports property acquisition.
The cashflow problem in hospitality
Hospitality combines strong, weekly-settled card flow with pronounced seasonality: summer peaks for tourist areas, December peaks for city venues, and quiet stretches in between. Capex arrives in bursts at fit-out and renovation, and VAT bills spike after busy quarters. The challenge is funding refurbishment and bridging seasonal troughs without straining cash during the leaner months, which is precisely why turnover-linked products suit the sector.
What lenders weigh, and what to do next
Lenders weigh trading time (sub-12-month venues are harder), recent director changes, existing debt service from earlier expansion, and any sector restrictions on alcohol-led venues. Card-flow MCA providers such as 365 Business Finance underwrite against card takings, short-term lenders such as iwoca and Capify look at trading and bank data, while Allica Bank handles asset and commercial-mortgage tickets. If a venue has been declined on trading time, the sub-12-month guide and the post-MCA guide set out the alternatives. If you run a limited company or LLP, you can send an enquiry through FundBiz, and a business finance broker will contact you about your options.
Cash-flow shape
Strong card flow, weekly settlement, seasonal peaks (summer for tourist areas, December for cities), capex bursts at fit-out and renovation cycles. VAT-bill spikes after busy quarters.
Products that fit
- Merchant cash advance
- VAT funding
- Asset finance for kitchen equipment
- Working-capital term loans
- Bridging for property acquisition
Lenders to consider
- Capify
- 365 Business Finance
- iwoca
- Allica Bank (asset and commercial mortgage)
Typical decline reasons in this sector
- Sub-12-month trading
- Recent change of director
- Existing high debt service from earlier expansion
- Sector restrictions on alcohol-led venues at some lenders
FAQ
What kind of business finance fits hospitality?
Usually merchant cash advance or VAT funding. Every product that fits is under Products that fit above.
Why do hospitality businesses get declined?
The most common reason is sub-12-month trading. The others are under Typical decline reasons in this sector above.
Which UK lenders fund hospitality?
The first two on our list: Capify; 365 Business Finance. The full list is under Lenders to consider above.
Send an enquiry
Tell us what you need in 2 minutes. FundBiz is not a lender and does not run a credit check. We pass your enquiry to a business finance broker, who will contact you about your options. For limited companies, LLPs and partnerships with four or more partners.
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