Hospitality Business Funding UK 2025
Funding for pubs, hotels, restaurants, cafes. 365 Finance (hospitality specialists, same-day approval), iwoca (best rates). £5k-£250k for equipment, refurb, working capital.
Best Hospitality Funding Providers
1. 365 Finance - Hospitality Specialists
- Why #1 for hospitality: Understand seasonal patterns, alcohol purchasing cycles, weekend peaks
- Speed: Same-day approval (fastest)
- Factor: 1.15-1.40x
- Perfect for: Restaurants, pubs, hotels, cafes
2. iwoca - Better Rates
- Factor: 1.08-1.25x (saves £3k-£7k vs 365 on £50k)
- Trade-off: Less hospitality-specialized, 24hr approval vs same-day
- Choose if: Rate more important than specialist service
3. Equipment Finance - For Kitchen/Bar Equipment
- Cost: 5-10% APR (much cheaper than MCA)
- Best for: Commercial ovens, fridges, coffee machines, POS
- Amount: £2k-£100k per item
Hospitality-Specific Scenarios
Pub Refurbishment (£50k)
Best: 365 Finance MCA if need money fast (same-day), or Funding Circle loan if can wait (save £10k)
Restaurant Kitchen Equipment (£30k)
Best: Equipment finance (5-8% APR) vs MCA's 15-40%. Saves £3k-£8k.
Hotel Seasonal Working Capital (£75k)
Best: 365 Finance MCA - repay heavily in summer (high occupancy), minimally in winter (low occupancy). Perfect flex.
Cafe Expansion (£40k)
Best: If urgent: iwoca MCA (24hrs, 1.08-1.25x). If planned: Funding Circle loan (save 60%).
Seasonal Cash Flow Challenge
Why hospitality loves MCAs:
- August: £8k/day sales → £1,200/day repayment (15%) - affordable
- February: £1,500/day sales → £225/day repayment (15%) - affordable
Why fixed loans kill hospitality:
- Fixed £2,000/month payment
- August: £240k revenue → can afford £2k
- February: £45k revenue → can't afford £2k → default
Best Lender by Hospitality Type
- Restaurants: 365 Finance (hospitality experts)
- Pubs: 365 Finance or iwoca
- Hotels/B&Bs: 365 Finance (seasonal understanding)
- Cafes: iwoca (better rates for smaller amounts)
- Takeaways: iwoca or YouLend
Conclusion
365 Finance is purpose-built for hospitality - same-day approval, understands seasonality, dedicated managers. Worth the slightly higher rates (vs iwoca) for specialized service.
iwoca if cost-focused: Saves £3k-£7k on £50k vs 365, still good for hospitality.