Best Bar Business Loans Explained
Let’s now take a detailed look at each of the loan types outlined above to better understand how they can help your bar business at different stages of its development.
Term loans are generally offered by banks or credit organizations. Term loans follow a periodic schedule and are predictable with fixed lower-end interest rates. They may vary in size and structure, depending on your eligibility and in terms of your agreement.
Private lending companies might suggest more stringent terms and higher rates than banks. A term loan can cover various building and construction expenses and working capital.
OnDeck is our recommended lender for long-term loans. If you are searching for a trustworthy operator with solid customer support and flexible loan plans, OnDeck is for you.
Although it can be a bit difficult to qualify for an SBA loan, it may be worth your efforts. The interest rates are lower than most other loan options, and generally speaking, you can trust the lender as they have government authority backing.
SBA loans are short-, mid-, or long-term, depending on the approved amount and the credit history of your business.
Your specific business goal will determine which SBA loan will work best for your business. If you are looking for working capital, a 7(a) loan is a good option. This loan type is also popular with startup companies. If you want to buy real estate or equipment, however, an SBA 504/CDC loan is a more suitable option.
SBA loan lenders must be licensed by the government. Our lender of choice for this category is SmartBiz. SmartBiz provides an online marketplace. You can go to this marketplace to find the best loan option for your bar business.
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.
The amount you can loan will vary based on your current or expected income. However, if you need a few hundred thousand dollars you likely won’t need collateral.
Although you will be able to max out the line of credit, you may want to manage it in a more savvy way. It is more advisable to keep the money for an urgent situation - such as during the low season or when you need money to make a large inventory purchase.
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.
To receive a cash advance from a lender, you will need to sell part of your future bank deposits or credit card sales to a financial organization. You will receive a lump sum, which you can use immediately, in return. You will need to meet minimum sales requirements to maintain this financial interaction. (Note that a cash advance is, technically speaking, not a loan.)
If you're experiencing time-sensitive financial difficulties, a cash advance may be a good option. If, for example, some of your regular clientele have open tabs you can apply for a cash advance.
Square Capital is a top cash advance provider. To qualify for this loan type, you have to be a Square service merchant. Square Capital’s automatic payback is very convenient as it is completely automated and direct links to your point of sale system.
The short-term loans that Fora Financial offers have flexible payments that make them a good choice for any bar business. They also make the application as easy as possible and are quick to finalize the entire process. A loan can be approved in just 24 hours and money deposited in only 72 hours.
Many aspects of a bar business can be improved with the use of cash from a short-term loan. New equipment, renovations, expansions, and additional staff can add to the value of the company after receiving a loan.
Qualifying for a short-term loan from Fora Financial is relatively uncomplicated and the process can be done online. A company needs to have been in operation for a minimum of six months before applying, and it should make more than $12,000 per month in gross sales.