Business Loans for Bar Owners
Quick Working Capital Option for Bars & Night Clubs
Owning any type of a bar or club can be a financial challenge.
Business can be seasonal or inconsistent, putting a strain on operational budgets. Or, if you’re very successful, you might think about expanding your venture. Maybe you’ll add an addition to your current establishment. Or bring in something new, like food or craft brews. You might even be considering opening another location.
Or you could just be behind on the bills.
In any case, you’re going to need money. Depending on your situation, you could need a big injection of cash—opening a new location might come with a price tag of up to $850,000.
Unless you have a huge amount of cash on hand, you’re going to need a business loan. Shield Funding has been securing small business loans for bars for more than a decade and we offer a variety of financing options that can be tailored to fit your needs. Few bar owners will be able to expand their business without taking a loan, but there are several types of business loans that may fit your situation.
What Do I Need to Qualify?
Below is a list of the requirements to get approved for business funding with our most basic program. There may be additional factors that are considered, meeting these three requirements though gives you a very high chance of having your application approved.
How Do I Apply?
Applying has never been easier. You can either call our toll free number 24 hours 7 days a week at
Submit your online application by clicking apply below and entering a few basic details about your business.
Types of Business Loans Available
1. Small Business Loans
This is a standard term business loan. You can often get large amounts of money—sometimes up to $1,000,000. Which you might need if you’re opening a new location.
Smaller amounts are also available for bar owners looking to expand their current establishment.
You need a minimum credit score of 500 to qualify for this type of loan. You also need to have been in business for at least two months and have monthly revenue of $8,000 or more. Finally, we require two monthly deposits at a minimum in your business bank account.
The advantage of a small business loan is that you can use the funds for anything you want. You can buy a location, pay rent, buy or upgrade your equipment, pay your employees, pay other operational costs, or make any other investment required for your business.
This type of loan is great for covering the costs associated with expansion. You’ll need to pay rent on the first few months of a new space. Buy new taps to fill out the bar, as well as stools, tables, and chairs for your new customers. Launch a marketing campaign.
There are all sorts of costs associated with opening a new location. And a small business loan can help you with all of them.
The rates you get depend on your credit and business financials, but you can expect somewhere between 5 and 45%. And terms range anywhere from 3 to 36 months.
It’s important to understand that it may be hard to qualify for a traditional term loan from a bank, especially if you’re relatively new in the business. Shield Funding is more flexible, and we have the ability to offer bar owners no-collateral business loans. You’ll just have to prove that you have enough revenue to qualify.
2. Equipment Financing
These business loans are specifically for buying, leasing, or upgrading equipment. If you expand your bar, you’ll probably need more taps and you might need another POS station.
Adding brewing equipment or a kitchen could cost hundreds of thousands of dollars.
Why go through all the work and risk to purchase expensive equipment when just taking a small business loan is the solution?
Earmark your small business loan for a specific purpose, and stick to it. Only purchase equipment and all the related costs to upgrading or purchasing new equipment.
Another important reason to utilize a business loan for equipment is that you can avoid as much as 20% or more that can be required as a down payment on a straight equipment loan. So if you’re investing $100,000 in a new brewing system, you’ll need to put up $20,000 or more. That’s a lot of money.
It’s also important to note that you don’t actually own the equipment until the end of the loan, which some business owners don’t like. And it depreciates during this time, which could have tax implications.
All that being said, a small business loan for equipment financing is a great way to expand your business if you can’t afford to buy the equipment outright. And because you may be able to avoid any down payment costs, you might be able to save a lot of time and money.
3. Bad Credit Business Loans
If you have bad credit, it will be even harder to get a traditional loan. But we work with bar owners of all types. As long as your credit score is at 500 or above, we can work with you to find the best loan for your situation.
You’ll still need two months in business and $8,000 in monthly revenue. And you’ll need five monthly deposits, instead of two. Bad credit business loans also have a slightly higher range of interest rates, at 12–45%.
When traditional banks won’t even consider you because of your credit, give us a shout.
4. Business Line of Credit
A business line of credit is a lot like a credit card—you get a maximum amount of credit and can spend any amount below that repeatedly (as long as you pay it back in between withdrawals).
That makes lines of credit great for day-to-day purchases like inventory, decor, or marketing. Because bar inventory usually has high turnover, you’ll be making a lot of inventory purchases. So a financing option like this can be a big help.
Because it’s always available once you’ve been approved, it’s also a big help for weathering unexpected costs. Your keg cooling system might break, for example—and you need to get it fixed as fast as possible.
Or you could come across an opportunity to take part in a local event that requires some upfront cash. Because you’ve already been approved, you’ll have the funds on hand to take advantage.
Interest rates are relatively low—usually in the 5–10% range. And because you can get up to $250,000 of revolving credit, you can use it to build up some momentum when you grow your business.
We work with borrowers who have a credit score of 650 or higher, have been in business for six months or more, and have monthly revenue of at least $10,000 for business lines of credit. We also require at least five monthly deposits.
5. Merchant Cash Advance
Like many of our small business loans, a merchant cash advance can be used to cover almost anything in the day-to-day operation of your business.
If you need just a little help on payroll, getting business funding with a cash advance is a great solution. Whether you’ve gotten a bit behind or you need to bring on new staff to help out with a seasonal boom, this type of loan makes it possible.
And it can help with other day-to-day costs, too. Maybe you want to install some TVs so your patrons can watch sports or the news while they’re drinking. Or you decide to offer activities like lawn bowling and board games.
No matter what your costs are, there’s a good chance that a merchant cash advance can help.
But unlike the other financing options on the list, you don’t make regular payments to pay back the loan. Instead, your repayment is debited from your credit card payments on a daily or weekly schedule.
This makes repayment easier, but you’ll need consistent and predictable revenue to make it work.
Like the small business loans listed above, you can get up to $1,000,000 over up to three years. And there are a wide variety of interest rates you might see, depending on your credit score and your business history, but this business funding option is available with poor credit so it can work for most bar owners.
We work with business owners who have a credit score of 500 or higher on merchant cash advance loans. If you’ve been in business for two months, have monthly revenues of $8,000 or more, and process credit cards in your business as a form of payment, we’d love to talk to you about a merchant cash advance.
Financing Tips for Your Bar Expansion or Growth
Our experience in securing business funding for bars over the years means we understand the various reasons why you might need funding.
And we know the different types of loans that will best suit your business. Here are a few things to consider when you’re looking at getting some help for maintaining or growing your bar.
Location of Your Expansion
Unless you expand your current location, you need to either lease space or take out a mortgage (which can actually be cheaper in the long run).
Great locations are often very expensive; they might lease for $15–$35 per square foot per year. Or more, depending on the location. High-traffic locations that draw a lot of customers, like downtown storefronts, have big price tags.
Of course, you probably won’t lease or buy a bar that’s ready to open for business immediately. You’re more likely to find a space and then renovate it to work for your next location. That can be expensive, too—up to $120 per square foot.
So by the time you’ve leased the space and built up a 3,000-square-foot bar, you could be looking at close to half a million dollars.
And there are plenty more expenses to consider.
You need a lot of equipment to run a bar. You’ll start with a tap, for example—plan on at least $4,000 for a simple 12-tap system. And you can spend a lot more than that if you want more than basic features.
Customers have to pay somewhere, so you’ll need at least one point-of-sale location. Even using an iPad with a POS system like Square will be a few hundred dollars. Full cash registers, card reading machines, contactless payment systems, and other POS solutions add to the cost.
Bizfluent estimates equipment costs for a bar at $50,000–$100,000. But there are some other costs that you’ll need to consider, depending on how you plan your expansion.
What about a kitchen? If you serve food at your bar, you’ll need at least a small kitchen. A full kitchen—even a small one—can cost $250,000 or more. And bigger kitchens cost more.
The craft brewery business is taking off, so you might consider buying brewing equipment for your new location (or for expanding the offerings at your current location).
You can plan on at least $100,000 for that equipment. And you’ll probably want to offer more than just one or two brews, so consider earmarking more.
As you can see, the equipment costs for a bar are highly variable. A small neighborhood bar might only have a few taps. A larger downtown location could include numerous craft brews, dozens of taps, a kitchen, and a stage for music.
It all depends on what kind of bar you want to open or expand.
You can get a good idea of how much you’ll pay in operating costs based on your current business. Using your current capacity and operating costs you will get a rough estimate of how much you might pay when you expand.
That includes thousands of dollars’ worth of alcohol every month, paying staff, buying food, paying for utilities and insurance, marketing and advertising, and a whole lot more.
You could easily rack up a monthly bill of $20,000, especially if your bar is very successful. Just stocking the bar can cost 20% of your gross sales.
And you’ll need to be able to pay that right away, whether you’re expanding or opening a new location.
Licenses and Insurance
To own a drinking establishment, you’ll need a license. The cost of that license depends on where you live. Toast lists license fees between $100 and $13,800 in different states.
The kind of insurance you need may vary by where you live, too. And there are a lot of different insurance policies to consider. Various types of liability, equipment, building, workers compensation, and other policies can cost a lot.
Trusted Choice says you can plan on paying between $3,000 and $5,000 per year for insuring a bar. Though that number may change based on the size, type, and location of your establishment.
Because you already own a bar, you’ll have an idea of what to expect for these costs in your location. Just know that they might change if you offer different services or create a much larger establishment.
Get Started With a Business Loan for your Bar Today
We make it easy to get a business loan for your bar. We require a minimum of paperwork and no upfront fees. And in some cases, you can get approved in one or two days. That means you get the money you need to grow or maintain your bar fast.
There are lots of options for loan types, deposit schedules, rates, and terms. We work with you to find the best loan for your business.
And applying is easy, too. Just call (888) 882-6117 or fill out the online apply form to get started.