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OakNorth Bank lends £2.6m to UK pub operator Red Oak Taverns

OakNorth Bank is providing Red Oak Taverns, an operator of pubs in the UK, with a £2.6 million loan through the government’s Coronavirus Busines Interruption Loan Scheme (CBILS), ensuring liquidity for the next months.

The FinTech bank, which is powered by the OakNorth platform, is accredited with the British Business Bank (BBB) to disperse the funds through the CBILS.

Red Oak Taverns has been a client of OakNorth Bank since 2016, receiving a £42 million loan in 2018 to refinance existing debt and provide financing for the acquisition of 18 pubs from Wadworth & Company in 2019.

The company, which was founded in 2011 by Aaron Brown and Mark Grunnell, currently operates 180 pubs throughout the UK.

OakNorthWith hospitality and dining being one of the hardest-hit sectors, Mohith Sondhi, Senior Debt Finance Director at OakNorth Bank, said it is instrumental to provide lending to businesses that were, and continue to be, profitable and successful prior to the crisis

“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,” Sondhi said.

“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.”

Red Oak Taverns has taken the 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, and to address the impact of COVID-19.

The funds will also assist with working capital requirements and contractual obligations, should the sector face another lockdown.

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.”

Following months of lockdown, pubs are set to open in the UK from 4 July 2020.

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