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This paper assesses a £510,000 owner-occupied facility (68% of vacant-possession value) for Bell Taverns (Bristol) Ltd to purchase the £750,000 freehold of The Bell, a public house with eight letting rooms in Totterdown, Bristol, which the applicant Mr. Connor Doyle has operated as a leasehold tenant for the past two years. Debt service of circa £70,500 (capital and interest over 12 years at specialist hospitality pricing of ~9.25%) is covered 135% by adjusted EBITDA of £95,000 — a figure that includes the £24,000 of rent the purchase extinguishes.

The strengths are that the operator is buying the business he already runs, at a price supported by bricks-and-mortar comparables: two years of accounts under his own management show turnover of £571k then £614k with genuine diversification — 56% wet, 29% dry, 15% rooms (eight rooms at 61% occupancy and a £52 ADR generating £92,600). The rent add-back is the cleanest kind: a contractual obligation that terminates on completion, verified against the lease and bank statements.

The primary risks are sector and depth. Hospitality EBITDA is cyclical and cost-exposed (labour, energy, duty); the accounts history under this operator is two years, not the three a committee prefers; Mr. Doyle is a first-time freeholder whose prior role was deputy manager of a managed house; stressed cover at +200bps is 122%; and the going-concern value (estimated £820k) exceeds the £750k VP basis lent against — correctly conservative, but a reminder that downside recovery depends on selling a pub as a pub.

Following rebuttals, the rent add-back was accepted in full against the lease and completion mechanics, and the rooms-income mix was verified from booking-platform statements; the EBITDA sustainability argument was only partially accepted on a two-year record; the claimed £40,000 cash reserve was rejected as unevidenced — no statements were produced. The C stands. We recommend proceeding with a hospitality specialist, conditional on a minimum £35,000 evidenced and blocked cash reserve at drawdown, quarterly management accounts, and a Red Book valuation reporting both VP and going-concern bases.

The Bell is a freehold corner public house in Totterdown, Bristol — a dense, gentrifying residential neighbourhood with strong independent-hospitality trade — comprising a ground-floor bar and 42-cover dining room, a trade kitchen, first- and second-floor letting rooms (eight en-suite), a rear courtyard (32 covers) and owner's accommodation. The property is unlisted, in sound condition per the vendor's survey, with a full premises licence and no planning enforcement history.

Valuation basis is the crux of pub lending and is handled conservatively here: the £750,000 purchase price aligns with the bricks-and-mortar / vacant-possession comparable evidence (three Bristol pub-with-rooms sales at £680–790k), while the going-concern basis — fair maintainable trade of circa £614k turnover at a 1.3x multiple plus property — would support circa £820,000. The facility is sized at 68% of the lower VP figure, so recovery in a distress scenario does not depend on selling the trading business, only the building. The valuer will be instructed to report both bases plus alternative-use (residential conversion) as a floor, given Totterdown's residential values.

Adjusted EBITDA of £95,000 against annual debt service of circa £70,500 (£510,000, capital and interest over 12 years at ~9.25% — specialist hospitality pricing on a deliberately short amortisation) gives a DSCR of 135%. Stressed at +200bps (11.25%), debt service rises to circa £77,600 and cover falls to 122% — thin for a cyclical sector, which is the single biggest reason this paper is a C. The short amortisation is a feature, not a cost: the balance falls to circa £362,000 by year 5 (48% of VP value), de-risking the facility faster than the sector can plausibly deteriorate.

The EBITDA build-up, as underwritten: FY2026 operating profit £61,000, plus rent payable under the expiring lease £24,000 (terminates on completion — lease and bank statements verified; this is the one add-back category that is contractually certain), plus £6,000 of one-off lease-renewal legal and professional fees (invoiced), plus £4,000 of verified personal expenses run through the company = £95,000. Sensitivity: a 10% revenue decline with 60% flow-through cuts EBITDA to circa £58,000 — below debt service — which is why the blocked cash reserve and quarterly MI covenants are conditions, not comforts.

The borrower is Bell Taverns (Bristol) Ltd (Co. No. 14203319, incorporated 2022), owned 100% by Mr. Connor Doyle (34). Career: six years in Bristol hospitality including three as deputy manager of a 12-staff managed house, then two years operating The Bell under a tenancy — during which turnover grew from the vendor's £522k to £571k (FY2025) and £614k (FY2026). Adjusted EBITDA over his two years: £81k then £95k. Personal credit is clean; the £240,000 deposit plus costs is part-evidenced (£185,000 from family gift — gift letter provided — and savings statements), with the balance to be evidenced pre-offer.

Income diversification is genuine rather than cosmetic: wet £344k (56%), dry £178k (29%), rooms £92.6k (15%), with the rooms operating at 61% occupancy / £52 ADR off booking platforms (statements provided) — leaving upside via direct booking and midweek corporate trade rather than requiring it. Cost base risks are the sector's: payroll at 31% of revenue, energy contract expiring in 14 months, and duty/NIC changes landing annually. There is no three-year record under this operator, no group support, and no second site — the covenant is one man, one pub, trading well.

The base-case exit is continued trading with natural amortisation: at circa £362,000 by year 5 (48% of VP value, 44% of going-concern), refinance options include mainstream owner-occupier commercial terms that are unavailable at today's leverage. The secondary exit is sale as a going concern — a pub-with-rooms in a gentrifying Bristol neighbourhood showing a two-year growth record is a saleable package, with the going-concern basis (~£820k) providing headroom above the facility from day one.

The downside exit is sale of the building. The VP basis (£750k) is the lending basis, so a distress sale at even 15% below VP (~£637k) clears the year-2 balance of circa £478,000 with margin. The structural floor is alternative use: Totterdown residential values would support conversion (subject to planning, and noting policy protection of public houses can slow but rarely blocks change of use where trade is evidenced as unviable) — the valuer's alt-use figure will be reported for completeness rather than reliance.