Bars are popular locations for everything from casual gatherings to formal celebrations and parties. Bar owners often need to wear many hats in the course of a day and face many of the same challenges that restaurant owners do, some of which can make it difficult to grow a bar business.
At Select Funding, we have provided small business financing and equipment financing to bar owners because we believe that working capital should be easy to obtain. If you own a bar business and want to grow it, small business funding can help you achieve your goals. Here’s what you need to know about growing a bar business with bar funding.
How Do You Grow Your Bar?
Growing a bar business is a goal of many, if not most, bar owners. Of course, there are many ways that you can go about growing your business and increasing your profits.
You could grow your bar business by acquiring additional space to expand your premises or opening a new location in another neighborhood or town. You might achieve business growth by investing in new decor to improve the customer experience in your bar.
You can also grow your bar by creating a marketing strategy that will help you attract more customers. You could add live music, expand your menu, or buy specialty ingredients for your cocktails.
What Are the Financing Options for Bars?
Business growth requires working capital regardless of your industry or your specific business objectives. As a bar owner, you have multiple financing options available to you.
Small Business Financing for Bars
The first option is small business financing, which is essentially the same as business lending. Bar owners can obtain small business financing from a bank, a credit union, a private lender, or from an online lender such as Select Funding. Small business financing may come in the form of a loan or a line of credit.
The benefit of small business financing is that it may be used for any purpose you choose. For example, if you chose to expand your business to a second location, your business financing could be used to pay operating expenses or you could use your financing to extend your hours or pay for marketing to attract more patrons for your bar.
Equipment Financing for Bars
Unlike small business financing, equipment financing is earmarked for the specific purpose of buying equipment for your bar business. In the world of financing, equipment has a broad definition.
If you have older bar equipment that could use an upgrade or you want to outfit a second location with the latest technology, equipment financing can provide you with the working capital you need.
How Much Can You Borrow to Grow Your Bar?
One of the questions we hear most frequently from bar owners has to do with how much they can borrow from us if they want to grow their businesses.
Let’s start with small business financing. We can provide up to $250,000 in small business financing that you can use to invest in your bar business. You may use it to expand your hours, open one or more new locations, add staff, or launch a marketing plan to attract a new audience to your establishment.
Equipment financing can provide as much as $1,000,000 to help you purchase kitchen appliances and equipment, bar equipment, furnishings, decor, software, and even vehicles to help your business grow.
The amount you can borrow will be based on your application and your ability to repay, which we can determine using just a few basic pieces of information.
What Are the Requirements for Small Business Funding?
The requirements to get small business funding for a bar will vary from lender to lender and are likely to be strict with a bank or a credit union, and less strict with some online lenders, including Select Funding.
Bank or Credit Union Requirements
For a bank or credit union loan, here are the likely requirements:
- In business for at least two years.
- A personal FICO score of 690 or higher.
- Meet the minimum requirement for annual revenue, which may be as high as $250,000.
- A detailed business plan that outlines how you will spend the money you borrow.
- Business documentation, including copies of your tax returns, bank statements, balance sheet, income statement, articles of incorporation, leases, business licenses (such as a liquor license), and more.
- Collateral or a personal guarantee.
These requirements are similar for banks and credit unions, although you may have more wiggle room with a credit union since you would be a part owner if you joined one for your business banking.
Select Funding Requirements for Bar Funding
At Select Funding, we have kept our requirements simple because it’s our mission to keep small business financing accessible to as many small business owners as possible. We require only these three things:
- A personal FICO score of 525 or higher
- Own your own business
- A minimum of $100,000 in annual receipts
We’ll ask you to provide three months of business bank statements, which we’ll use to verify your annual revenue to make sure you qualify for small business financing. We do not require collateral, so you won’t need to provide any.
We’ll compare rates from more than 25 lenders to find you the best deal possible, and you won’t need to worry that you’re missing out on a better deal.
We provide both small business financing and equipment financing and the requirements are the same for each. We’ll review your application and bank statements using our automated system and may approve you on the same day you apply. In many cases, you can receive your funds in as little as 24 hours after approval.
What Can You Do with a Bar Loan?
A bar loan may be used for many different purposes. Here are some of the ways you can use the money from your loan.
Open a Second Location
The money from a bar loan may be used to grow your business by opening a second location or moving to a new, larger location to accommodate more guests. You can use loan money to pay for rent and moving expenses and to hire and train new, skilled employees to work at your bar.
Expand Your Hours
Depending on your local laws, you could also grow your business by expanding your hours. Many bars serve meals, so adding a lunch service could be a good way to increase your profits. Of course, adding hours is also likely to require hiring additional employees to work during those hours, and your loan money can pay for that, too.
Market Your Bar to a New Audience
Marketing is essential for business growth. You can use your bar loan to create a marketing plan and execute it. Alternatively, you could use it to hire a small business marketing agency to strategize for you and monitor your marketing campaigns on an ongoing basis.
Pay for Operating Expenses
Regular operating may include expenses such as rent, utilities, property taxes, payroll, and supplies, including everything from liquor to napkins. The money from your loan can pay for all of these things.
How Can Equipment Financing Help You Grow Your Bar Business?
The word ‘equipment’ may bring to mind images of heavy machinery, but in the world of equipment financing, there is a broad interpretation of that word. Here are some of the ways you can use bar equipment financing.
Bar and Kitchen Equipment
Equipment in a bar kitchen may include stoves, refrigerators, cookware, and more. Behind the bar, you’ll need taps, a sink, glassware, a cash register, blenders, and utensils such as spoons, shakers, and muddlers. You can pay for all of these things with equipment financing.
Bar Furnishings and Decor
The experience people have when they come to your bar is likely to play a role in determining whether they return. You can use equipment financing for everything from paint to artwork to bar stools, either in the bar you already own or in a new location if you decide to expand your business.
Bar Management Software
Bars and restaurants often use multiple software options to manage everything from their payroll to purchase orders. Equipment financing may be used to purchase bar management software, giving you the opportunity to streamline your operations and work efficiently.
Marketing Software
You may decide to handle your marketing internally by taking it on yourself to manage your social media accounts or email list. If you do, then using equipment financing to buy marketing software can be a huge help. You can use marketing software to manage your campaigns, track your return on investment, and attract new customers to your bar.
Grow Your Bar Business with Small Business Funding
Your bar business is your passion, and your passion deserves the fuel it needs to make your dreams into realities. Obtaining small business financing can help you pay your expenses, invest in your bar business, and achieve your most important business objectives.
Do you need bar financing to help your bar business thrive? Select Funding is here to help! Click here to read about our bar financing options and begin the application process today.
