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Bar Financing: Funding Options for Bar Owners

Owning and operating a bar or buying new equipment takes a large chunk of start-up capital. Our team of financial experts has reviewed and ranked the best small business lenders to help you get the bar financing you need.

Written by Page Grossman, updated on 12/16/2021
Financially Reviewed by
 Thomas J. Brock

Why You Might Need Bar Financing

While operating a bar might look simple from the outside, it takes a big chunk of cash to get started. Running a bar in a small town may cost as little as $20,000 to start, but if you’re looking to open in an urban area or to operate a combination of a bar and restaurant or nightclub, you’re likely looking at start-up costs into 7 figures. 

When you’re opening a bar, there are a lot of costs to think about, such as:

  • Rent or mortgage for the physical space of the bar
  • Funds to renovate or update the space
  • Money to make necessary repairs
  • Financing to buy equipment and supplies
  • Enough capital to help you operate at a loss for the first few months
  • Money to pay your staff 

There’s a lot to consider when opening a bar and you’ll need plenty of financing to help you along the way. 

The Best Overall Bar Financing Lender

When it comes to bar financing, the best lender is Biz2Credit. What makes them stand out from the rest is the speed at which you can apply and receive a decision. If you’re looking to move quickly on a property, this can be a critical part of your process. 

Biz2Credit’s application process takes just 4 minutes and they can make funding decisions as quickly as 24 hours. Once you are approved, you can get your funds as fast as 72 hours.

Lender
Features
  • Min. Credit Score - 600
  • Min. Annual Revenue - $250,000
  • Min. Time in Business - 18 months

Best 6 Bar Financing Options in 2022

When you’re looking to get bar financing, it can be smart to apply with multiple lenders to see who can help you get the best deal and lowest interest rates. Here are the top 5 bar financing lenders.

1. Biz2Credit - Best for Commercial Real Estate Loan

Since its founding in 2007, Biz2Credit has provided over $7 billion in loans to thousands of small businesses. After completing their short, online application, your small business is automatically matched with the best funding sources for your needs. Biz2Credit specializes in loan products such as working capital, term loans, and commercial real estate loans.

ProsCons
  • Can help you to get a commercial real estate loan to purchase property
  • Offer a “knowledge center” where you can learn about your loan, operating a business, and repayment
  • Biz2Credit is a marketplace where you can compare loans from different lenders
  • Commercial real estate loans can take 30 days to get approval
  • Requires annual revenue of $250,000 and high credit scores

Bottom Line

If you’re looking for bar financing, Biz2Credit offers a number of different loan products that can help to fill your unique financing gaps. If you’re looking to buy commercial real estate or get new equipment for your business, they’ll be able to help you find the right loan product from the right lender. Biz2Credit also offers loan products to veterans and minorities who are interested in opening a bar. 

Read the full Biz2Credit review for more details.  

2. Fundera - Best for SBA Loans

Fundera is all about helping small business owners make the best financial decisions. They offer a ton of educational articles, loan comparison tools, and a diverse network of financial providers. Fundera does the leg work for you. You submit one application, connect with your loan specialist, and then shop your options. Once they’ve found bar financing options for you, you can compare them all at once to find just the right fit.

ProsCons
  • With a wide variety of funding partners, Fundera will help you find the best loan product for your needs. 
  • Their comparison tools are free to use
  • Fundera is a marketplace where you can compare loans from different lenders
  • Because Fundera works with so many different lenders, you may have to submit more than one application or add additional information to your original application.

Bottom Line

If you want to pick from a large pool of lenders, Fundera is the best option for you. Because they work with a number of different financing partners, you’ll be able to choose the best loan option that fits your bar financing needs.

Read the full Fundera review for more details

3. Fora Financial - Best for Merchant Cash Advance

Fora Financial is an online, alternative lender. They offer loan products such as merchant cash advances and short-term loans for small businesses. They can have funding available to borrowers in as little as 72 hours.

ProsCons
  • Flexible financing, such as no specific credit score minimum and no collateral required
  • Simple, online application
  • Discounts offered on quick repayments
  • Businesses must be in operation at least 6 months before the application
  • Require more frequent payments on their repayment schedule

Bottom Line

While Fora Financial only offers merchant cash advances and short-term business loans, the funds from these loans can be used for almost any purpose, which can give small business owners a lot of flexibility. When it comes to finding financing for your bar, Fora Financial’s merchant cash advance would be most helpful for someone who is in need of a loan quickly. 

Learn more about Fora Financial in our comprehensive review

4. BlueVine - Best for Line of Credit

BlueVine is a small business lender that offers lines of credit. A line of credit is a unique loan option that’s great for urgent expenses and filling a cash-flow gap.

ProsCons
  • Quick access to short-term funding, you’ll have an answer within 24 hours
  • Your credit score doesn’t affect your ability to get a loan
  • Easier to get approval for loans than from a bank or the SBA
  • Short repayment terms and high-interest rates
  • A personal guarantee is required

Bottom Line

If you’re struggling to get your bar’s cash flow in check, a line of credit from BlueVine can be valuable. A line of credit can be a great loan option for bar owners in that you can get approved for the loan now and make a large purchase later. Once that purchase is paid off, you can then make another large purchase. This can cover a cash flow gap that your bar is facing. BlueVine can also be a long-term loan solution for your bar business. Once you create an account with them, you can receive multiple loans over time.

Read the full BlueVine review for more details.

5. Fundbox - Best for Quick Application

Fundbox is an online lender that specializes in offering small businesses revolving lines of credit. A line of credit is an authorization for a small business to spend up to a certain amount, but you only repay what you use. A unique quality of Fundbox is that they allow you to connect your accounting software, bypassing paperwork and applications.

ProsCons
  • Simple, automated application process
  • Accessible to new businesses, startups, and businesses with bad credit
  • Once approved, it’s easy to apply for more credit
  • Short repayment terms between 4 and 24 weeks
  • Minimum annual revenue of $50,000 required

Bottom Line

Bar operation can be tedious. You will need to purchase a lot of inventory and this is just the beginning. A business line of credit is a great solution if you need money to meet your current expenses. A business line of credit is money that you can access immediately. What’s great is that if you pay the money you use back within a certain time period, the lender won’t count this money against the interest you need to pay. 

If you're worried about your credit score and are still in need of a line of credit, Fundbox is a great option. It offers loans for small businesses with 500 and higher and doesn't require collateral.

Read the full Fundbox review for more details.  

6. Credibly - Best for Business Expansion Loan

Credibly is an online lender that offers small business loans such as merchant cash advances and term loans. While Credibly’s interest rates are comparable to other online lenders, they offer prepayment discounts. Loan funding can be as quick as the same day.

ProsCons
  • Requires only 6 months of being in business
  • No minimum credit score required
  • No use-case restrictions on working capital loans
  • Daily repayments
  • High revenue requirement

Bottom Line

Credibly offers a variety of loan types that can be used for a number of different use-cases. The application process is simple and if you can repay the loan early, you receive incentives. Credibly is a great lender for those who haven’t been in the bar business very long as they’re willing to work with bar owners who have only been in business for six months.

Read the full Credibly review for more details.

Best Bar Financing Options - Features Comparison

Here are the top loan types that can serve you before the opening date and during the operation of your bar.

Apply Now

Financing Need

Best Loan Type

Loan Features

Biz2Credit

Leasing real estate

Commercial real estate loan

Loan amount: up to $6 million

Terms: Depends on the lender

Interest rates: 8.99% - 10% APR

Time to get the loan: Up to 30 days

Fundera

Buying new equipment

Term and SBA loans

Loan amount: Depends on the lender

Terms: Depends on the lender

Interest rates: Depends on the lender

Time to get the loan: Depends on the lender

Fora Financial

For fast cash

Merchant cash advance

Loan amount: up to $500,000

Terms: prepayment incentives

Interest rates: Depends

Time to get the loan: as little as 72 hours

BlueVine

Fixing cash flow during a slow season

Invoice factoring

Loan amount: up to $5 million

Terms: Depends

Interest rates: as low as 0.25% per week

Time to get the loan: as fast as 24 hours

Fundbox

You need extra funds regularly

Revolving line of credit

Loan amount: Depends on your revenue

Terms: Flex Pay

Interest rates: 4.66% for 12-week terms and 8.99% for 24-week terms.

Time to get the loan: Within minutes

Credibly

Remodeling an existing space

Business expansion loan

Loan amount: Up to $250,000

Terms: 18 or 24-month

Interest rates: Start at 9.99%

Time to get the loan: As soon as same day

How to Choose the Best Loan for Your Bar

When it comes to choosing the right loan and lender for your small business, there are a number of unique factors that you should consider. 

  • Application process: Each lender has a different application process. You want to look for one that doesn’t take very much time and that you’re able to do entirely online.
  • Variety of loan options: Choosing a lender with a variety of loan options allows you to find the best type of loan for your business and your unique needs. 
  • Interest rates and fees: A loan isn’t just free money. You pay for the convenience of a loan through the interest rate and fee. You’ll need to find a loan product with a low enough interest rate to be affordable.
  • Qualification process: Your business is as unique as you are. This means that you must find a lender that’s able to work with your unique qualities. Lenders have specific requirements for small businesses that they work with, such as time in business and annual revenue requirements. 
  • Customer support: When you have questions about your loan, you’ll want to be able to reach the right person.
  • Online user reviews: Be sure to read online reviews of the different lenders to learn more about the pros and cons of each before choosing which lender to work with.
Recommended Reading: Best Restaurant Business Loans for 2022

How Much Does it Cost to Open a Bar Business?

As a bar owner you may find that you are often struggling to cover the costs of rent, expensive drinks, utility bills, and marketing. Bars may not suffer from seasonality, as much as a hotel on the beach does, but a bar does often experience changes in pace during the course of a year.

Savvy managers may have money put aside for at least six months, however, most bar businesses primarily rely on the money they get from their customers. 

Let’s take a look at some of the expenses bar owners will have to incur. 

  • Rent or real estate purchase: You'll either be renting or buying your bar location. Although renting adds a substantial amount to your monthly expenses, buying will require a huge amount of starting capital.
  • Construction or renovations: Not all spaces come as you imagine them. Chances are that you'll need to do at least some renovations and construction work. As such you will also need to pay for permits, materials, and workers.
  • Sound and lighting: A bar business should have a wow factor to set you apart from the competition. Sure it can be a topical or design element, but having professional lighting and sound equipment is often necessary for bars.
  • Taxes, licenses, and permits: When you serve alcohol and food you will need to pay a fee to the local authorities. Learn what these fees are and include them in your financial plan.
  • Utilities: Utilities will be one of your largest recurring payment categories. You will also need to account for heating and cooling during the warm and cold seasons.
  • Payroll: While you might need to consider contractor payments when you are starting out, your basic payroll will be predictable and constant.
  • Marketing: While word-of-mouth and events might help you with your advertising, don't forget to invest in your online presence. Use social media ads to expand your audience and promote your brand.
  • Inventory: Drink mixers, cocktail glasses, and attributes all cost money. These are part of your brand, so you might want to spend a little on these items. Alcohol and soft drinks purchases may take up a large bulk of your resources, both in the initial stage and during operation. 
Recommended Reading: Best Vending Machine Financing for 2022

Cash Flow Tips for Bars

While a loan can help you to fill a cash flow gap or to purchase a new piece of equipment, the day-to-day operations of your bar are dependent on your ability to manage your cash flow. Here are a few tips. 

  • Prepare for unexpected expenses: Whether it’s a piece of equipment needing repair or hiring and training a new employee, unexpected expenses are always popping up for small businesses. Have a small slush fund ready for these expenses. 
  • Sign up for a business bank account: A business bank account is necessary for you to get business financing and separate your business and personal finances. 
  • Get a business credit card: A business credit card can help you to manage small cash flow gaps by paying for large expenses over time. 
  • Use a business savings account for emergencies: A business savings account allows you to set aside some slush funds to help you pay for emergencies. Keeping this money in a savings account makes it just a little bit harder to spend without planning ahead.
  • Financing affects your cash flow: If you do plan to get a loan or financing for your small business, be sure to look 12 or more months into the future to see how that will affect your cash flow.

Bottom Line

No matter what business you operate, getting a loan can be a time-consuming activity. And, it can be challenging to get approved. Luckily, getting bar financing is just a little bit simpler because selling alcohol is considered recession-proof. No matter what’s happening in the economy, people will continue to drink. Seeking financing for a bar makes it just a little bit easier to find a loan than it is for other businesses.

Frequently Asked Questions (FAQs)

Now that you know a little bit about the different lenders who offer bar financing and the different types of loans that are available, you might still have some questions. 

How Much of a Loan Can I Get For a Bar? How much financing you can get for your bar will depend greatly on your business, your annual revenue, and what collateral you have to put up for the loan. Each lender will have slightly different qualification requirements and will be able to offer you differing loan amounts. You may need to apply at multiple different lenders to get the amount of bar financing you need.

Can You Get a Bank Loan to Open a Bar? Getting a term loan from a bank to start a business is a challenge. Banks want a guarantee that you’ll be able to pay back your loan. With a new business, they have very little data and information to base their assessments on. If you’re looking to get a loan for a new business, you’ll likely have to offer a personal guarantee and personal financial information in return.

What Licenses Do You Need to Open a Bar? As a business, your bar will need a business license to be open and operate. Additionally, because bars serve alcohol, you will be required to obtain a license from the Alcohol and Tobacco Tax and Trade Bureau, which is the federal licensing body for alcohol and tobacco sales. The cost of your license will depend on your state and you may need additional licenses on top of it.

How Much Does it Cost to Run a Nightclub? Your monthly cash flow needs will depend greatly upon the size of your bar or nightclub. If you’re operating in a small town, your expenses and income will be much lower than if you’re operating a large establishment in an urban setting.

Recommended Reading: Best Photography Business Loans