OakNorth Bank – the UK bank powered by OakNorth – has completed a £2.6m loan to Red Oak Taverns, the national pub operator founded in 2011 by entrepreneurs Aaron Brown and Mark Grunnell. As an accredited lender with the British Business Bank, OakNorth Bank was able to disperse the funds through the government’s Coronavirus Business Interruption Loan Scheme (CBILS).
To address the impact of COVID-19, Red Oak Taverns has taken this loan as a standby facility to ensure the business has the available liquidity, if required, to support the pub group’s gradual ramp-up of trade over the next few months. Red Oak Taverns will also use the funds to assist with working capital requirements and contractual obligations, should the sector face another lockdown.
Since 2016, Red Oak Taverns, has been a long-standing client of OakNorth Bank. In 2018, Red Oak Taverns received a £42m loan to refinance its existing debt and provided the business with standby financing for future acquisitions, to which the team tapped into in 2019 to purchase 18 pubs from Wadworth & Company, a Wiltshire-based brewer and pub operator. Together with the acquisition of a further solus pub, Red Oak Taverns has since grown the business from 161 to 180 pubs throughout the UK.
Mark Grunnell, Co-founder and Chief Executive of Red Oak Taverns commented: “Over the years, OakNorth Bank has been incredibly supportive of our vision and business model. These are unprecedented and uncertain times. We do not have the comfort of overdraft facilities or revolving credit facilities so accordingly, securing this standby capital gives us the flexibility and comfort to focus on our wider business, to support our hard working tenant partners and to safeguard our business for the long-term. We are fortunate to have a trusted lender and partner that understands the requirements of our business, like OakNorth Bank.”
Mohith Sondhi, Senior Debt Finance Director at OakNorth Bank said: “With hospitality and dining being one of the hardest hit sectors, it’s instrumental that we continue to lend to businesses that were and, continue to be, profitable and successful prior to the crisis, such as Red Oak Taverns. Under Mark and Aaron’s management, Red Oak Taverns has provided support packages to all of their pubs including substantial rent concessions, complimentary PPE packages, purchasing additional garden furniture to maximise outdoor occupancy and implementing an order and pay app to minimise contact and to better protect staff and patrons. Having the additional liquidity that CBILS provides, positions Red Oak Taverns well to weather this and any future COVID-19 storms. We are proud to be associated with Red Oak Taverns and look forward to working with Mark and Aaron in the current period and in the future. It’s an excellent business with a fantastic management team.”
Notes to editors
About the Coronavirus Business Interruption Loan Scheme (CBILS)
CBILS is a demand-led scheme offering lending to smaller businesses with turnover of up to £45m. Invoice finance and asset finance facilities are available from £1k to £5m, while term loans and revolving credit facilities are available from £50k to £5m. The government makes a payment to cover interest and lender-levied fees under CBILS for the first 12 months. The scheme is due to close for new applications on 31 January 2021.
About OakNorth Bank plc
OakNorth Bank provides fast, flexible and accessible debt finance (from £500k to £50m) to fast-growth businesses and established property developers / investors. It has debt finance teams in London, Manchester, Bristol, Birmingham, Leeds and East Anglia.
Since its launch, the bank has:
It is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Visit www.oaknorth.co.uk for more information.