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Bar Financing: Best Business Loans and Lines of Credit
Owning and operating a bar or buying new equipment takes a large chunk of start-up capital. Our team of financial experts reviewed and ranked the best small business lenders to help you get the bar financing you need.
Written by:Page Grossman
Reviewed by: Sarah Brooks, Personal Finance Writer and Editor
While operating a bar might look simple from the outside, it can cost tens of thousands of dollars just to get one up and running. If you’re looking to open in an urban area or operate a combination of a bar and restaurant, though, you’re likely looking at start-up costs into seven figures. When opening a bar, there are many expenses 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
Luckily, a small business loan can be used to pay for most, if not all, of these expenses.
Top Picks for The Best Bar Financing Options
- Lendzi - Best for Businesses with High Revenue
- Backd - Best for Cheapest Interest Rates
- National Funding - Best for Bar Equipment Loans
- Credibly - Best for SBA Loans for Bar Owners
- SMB Compass - Best for Fast Funding Bar Loans
- Bluevine - Best for Business Lines of Credit for Bars
- Biz2Credit - Best for Covering Start-up Costs
When you’re looking for bar financing, it can be smart to apply with multiple lenders to see who can help you get the best deal with the lowest interest rates. In this review we highlight the rates, fees and terms of each lender and explain what makes them a good option. We also share potential downsides of each lender, and provide a rating methodology you can use to select the best option for your needs.
Best Bar Financing Loans and Lines of Credit
Best Overall
Lendzi - Best for Businesses With High Revenue
Factor Rate
Starting at 1.10
Loan Amounts
Up to $4 million
Min. Annual Revenue
$180,000
Key Features
- Borrow up to $4 million in working capital
- Min. credit score: at least 500
- Min. time in business: 6 months
- Equipment financing up to $2 million
- Business line of credit up to $250,000
- See your options without hurting your credit
- Flexible terms: 3 to 15 months
- Excellent customer reviews on independent review sites
- Get funding in as little as 24 hours
Pros & Cons
- Easy online application
- Applying does not affect your credit score
- Bad credit accepted
- Excellent customer ratings
- Fast funding times
- Multiple loan options
- Startups may not qualify
- High annual income requirements
Overview
Lendzi is a direct lender and a partner with over 75 other lenders, making them our go-to recommendation for bar businesses with high revenue. Lendzi was founded in 2020 and allows you to compare multiple loans and lenders when needing a loan, all in one spot. The company also caters to those with less then perfect credit or to those who have been denied a loan elsewhere.
Main Features
Lendzi offers seven different types of bar loans to choose from. Their working capital loan goes up to $400,000 and requires a credit score of just 500. Terms range from three to 15 months, and factor rates start at 1.15. If you need new equipment or inventory, an equipment financing loan may be your best bet. This type of financing comes with better interest rates because the equipment acts as collateral. The minimum credit score required is 550 and you can borrow up to $2 million. Rates start at just 3.49%. Once you submit your online application, a Lendzi representative will give you a call to review your application, discuss your loan options, and answer any questions you may have. To qualify, Lendzi recommends six months of business history and $180,000 in annual revenue.
If your bar business has high revenues and you need a loan, we recommend applying with Lendzi. With so many lenders and loans to choose from, the odds are in your favor that you’ll qualify for funding with Lendzi. The application takes just a few minutes to fill out and does not impact your credit score, so you have nothing to lose by giving them a chance.
Low Rates
Backd - Best for Cheapest Interest Rates
Factor Rate
Starting at 1.10
Loan Amounts
Up to $2 million
Min. Annual Revenue
$200,000
Key Features
- Borrow up to $2 million
- Min. Credit Score: 640
- Min. Time in Business: 2 years
- Industry best factor rate for MCA - as low as 1.10
- APR for the Line of credit product starts at 35%
- Flexible repayment terms up to 16 months
- Get funding in as little as 24 hours
- Check your rate with a soft credit pull
Pros & Cons
- Loans up to $2 million
- Fast funding times
- No collateral required
- Flexible payment options
- Must be in business at least one year
- Startups will not qualify
Overview
If you need a loan up to $2 million, whether that’s to renovate your existing space, purchase a new one, or simply have more capital at your disposal, Backd can help. Backd was founded in 2018 to help small businesses acquire the funding they need. They tailor their loans specifically to your business, making sure you get the best loan possible for your unique situation.
Main Features
Backd offers working capital loans up to $2 million and business lines of credit up to $750,000. Working capital loans must be paid within 16 months, but payments can be made daily, weekly, or semi-monthly. Business lines of credit have no set terms and can be used again and again. Neither loan requires collateral, but to qualify you must be in business for at least two years and have $200,000 or more in annual revenue.
If you’re earning more than $100,000 per year and need additional funding, Backd could be the solution you’ve been looking for. The application takes just a few minutes to fill out and you’ll receive a lending decision almost instantly. If you accept the loan, funds will be in your account within 24-48 hours.
National Funding - Best for Bar Equipment Loans
Factor Rate
Starting at 1.10
Loan Amounts
Up to $500K
Min. Annual Revenue
$250,000
Key Features
- Min. Time in Business: 6 months
- Min. Credit Score 600
- Borrow up to $500,000 in working capital
- Equipment financing up to $150,000
- Factor rate From 1.10
- Fast funding
- Early payment discounts
- Equipment financing repayment 2-5 years
- Working capital repayment 4 months - 2 years
Pros & Cons
- Easy application with minimal paperwork
- Fast in as little as 24 hours of loan approval
- Early payment discounts
- High annual revenue requirements
- Can be expensive
- No mobile app
Overview
With an equipment loan from National Funding, you can receive the cash you need to ensure your bar has the latest and greatest equipment. Depending on your finances and unique situation, you may get approved for up to $250,000 to cover the cost of ice machines, cocktail strainers and shakers, high tables, stools, and more.
Main Features
National Funding’s equipment loans go up to $150,000 with repayment terms between two and five years. You can expect a starting pay rate of 1.10 and will need to repay what you borrow every month.
To qualify for an equipment loan, you’ll need a credit score of at least 600, two years or more of business history, and $250,000 or more in annual revenue.
If your bar earns at least $250,000 in annual revenue and you’d like to upgrade your equipment, a National Funding equipment loan may help. You can receive your funds within 24 hours and won’t have to come up with a down payment.
Credibly
Min. Annual Revenue
$180,000
Min. Time in Business
6 months
Min. Credit Score
550+
Key Features
- Borrow up to Up to $250,000 in term loans
- Borrow up to $400,000 in working capital
- Term loan rates range between 8-25%
- Working capital factor rate starts at 1.09
- Simple application process
- As soon as same day funding
- Open to high-risk industries
Pros & Cons
- Multiple loan options available, including SBA loans
- Low credit accepted for certain products
- No restrictions on working capital loans
- Not available for startups
- High revenue requirements
Overview
Credibly is an online lender that offers a variety of small business loans, including merchant cash advances, term loans, business lines of credit, and SBA loans. SBA loans are backed by the Small Business Administration and, because of that, typically come with lower interest rates and better terms.
Main Features
Credibly offers a variety of loan types that can be used for a number of different purposes. One of their most popular loan options is the SBA loan, which offers fixed interest rates as low as 6.99% and terms from two to five years. It typically takes longer to get funded with an SBA loan compared to other options, but the difference in savings may make it well worth your time.
To qualify for an SBA loan, you’ll need to have two years in business, a minimum credit score of 620, and a minimum annual revenue of $100,000. You cannot have any outstanding tax liens nor any bankruptcies or foreclosures in the last three years.
An SBA loan from Credibly can get you the funds you need for your bar business with a lower interest rate and longer terms than you may see otherwise. The funding time is longer, but if you can wait a few weeks for your loan, an SBA loan is a fantastic lending option.
SMB Compass - Best for Fast Funding Bar Loans
Interest Rates
Starting at 7.99%
Loan Amounts
$10K - $10 million
Min. Monthly Revenue
$20,000
Key Features
- Loans up to $10 million
- Min. credit score: can go as low as 550 for certain loans
- Min. time in business: 1+ years in business, no startups
- Funding times: 5 to 7 days for term loans and 24 - 48 hours for line of credit
- Flexible terms: 2 – 10 years for term loans
- Interest Rates: starting at 8.99% for term loans
- Applying does not impact credit score
- Nine loan products to choose from
Pros & Cons
- Low, competitive rates
- Large loan amounts
- Loan terms up to 25 years
- Excellent customer service
- Poor credit not accepted
- Not available in all states
- Must be in business at least one year
- High revenue requirements
Overview
If you need financing for your bar in a pinch, turn to SMB Compass. The lender offers a variety of loan types, most of which are funded in 1-2 business days of loan approval. Types of loans SMB Compass offers include business lines of credit, business term loans, equipment financing, invoice factoring, asset-based loans, and more. To qualify, you’ll need a minimum credit score of 650, $20,000 per month in revenue, and a business history of at least one year. Representatives are available M-F to answer your questions and walk you through the process, if needed.
Main Features
SMB Compass offers nine different types of small business loans to borrowers. Their mission is to make loans more accessible to small business borrowers by providing cost-effective and flexible lending solutions. SMB Compass business loans range from $10,000 to $10 million with terms up to 25 years. Rates start at 7.99% for qualified borrowers. The lender has currently provided more than 1,200 U.S. businesses with more than $250 million in financing. To apply, simply fill out their easy online application. It takes just a few minutes and will not impact your credit score. If approved, funding can be dispersed within 24 hours.
SMB Compass has strict qualification requirements, but in return they offer competitive rates, flexible terms, excellent customer service, and fast funding times. Whether you need a small loan to assist during a slow season or you’re looking to acquire a second location for your bar, SMB Compass can help. Contact them today to get started!
Bluevine - Best for Business Lines of Credit for Bars
Interest rates
Starting at 6.2%
Loan Amounts
Up to $250K
Min. Annual Revenue
$480,000
Key Features
- Funding up to $250,000
- Min. credit score: 625
- Min. time in business: 6 months
- Interest rates starting at 6.2%
- Loan Repayment 6-12 months terms
- Quick and simple application
Pros & Cons
- Quick access to short-term funding
- Monthly or weekly payment options
- Excellent customer support
- Short repayment terms and high interest rates
- Personal guarantee required
Overview
Bluevine is an online lender that offers small business lines of credit. The application takes just a few minutes to fill out, and you can receive a funding decision in as little as five minutes.
Main Features
Bluevine offers bar owners lines of credit up to $250,000 with rates starting at 4.8%. Each draw is paid back weekly or monthly over six or 12 months, and your available credit will automatically increase as you make your payments.
To qualify for a line of credit from Bluevine, you’ll need a minimum credit score of 625, $10,000 in monthly revenue, and to have been in business for at least six months.
A line of credit from Bluevine can help your bar business pay for operating expenses, open a new location, or purchase inventory. It works great for those that think they’ll need continuous access to funds.
Biz2Credit - Best for Multiple Loan Products
Min. Annual Revenue
$250,000
Min. Time in Business
6 months
Min. Credit Score
600+
Key Features
- Borrow up to $2 million
- Loan Repayment 12-36 months terms
- Variable APR depending on the applicant
- Multiple loan types available
- Funding in 72 hours
- Soft credit pull
Pros & Cons
- Multiple loan types available
- Fast decision and funding times
- High borrowing limits
- Requires high annual revenues
- Additional fees may apply
Overview
Since its founding in 2007, Biz2Credit has provided over $7 billion in loans to thousands of small businesses. After completing their 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.
Main Features
If you’re looking for bar financing, Biz2Credit offers a number of different loan products that can help to fill your unique financing gaps. They offer working capital loans starting at $25,000, term loans up to $500,000, and commercial real estate loans up to $6 million. Rates will vary by loan type and lender, but typically start at 8.99%.
To qualify for a loan from Biz2Credit, you’ll need a minimum credit score of 575 for working capital loans and 660 for term loans and commercial real estate loans. Minimum annual revenue is $250,000 across all three products, and you need to be in business for at least six months for a working capital loan. For term loans and CRE loans, the minimum time in business is 18 months.
Biz2Credit offers high loan limits for qualified borrowers. If your bar business meets the minimum qualifications, they are a lender worth pursuing.
Main Features of The Best Bar Financing Options
Lendzi4.5
Backd4.5
National Funding4.1
Credibly4
SMB Compass4.5
Bluevine4
Biz2Credit4.5
- Min. Credit Score - 500
- Min. Time in Business - 6 months
- Min. Annual Revenue - $180,000
- Loan Amount - Up to $400,000
- Interest Rate - Factor rates starting at 1.15
How We 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.
- Loan features: We looked at features such as how much you can borrow and what the repayment terms are.
- Application process: Each lender has a different application process. We looked for ones that don't take very much time and that you’re able to do entirely online.
- Interest rates and fees: Some lenders charge additional fees on top of interest rates, and rates can vary from lender to lender.
- Qualification process: 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 via both email and phone.
- Online user reviews: We read online reviews from sites such as Trustpilot of the different lenders to learn more about the pros and cons of each.
- Perks and bonuses: Some lenders offer additional perks, such as a grace period for late payments, advertising transparency, and advanced technology.
How Much Does it Cost to Open a Bar Business?
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 some renovations and construction work. 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. 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, including 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 should 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 drink purchases may take up a large bulk of your resources, both in the initial stage and during operation.
Cash Flow Tips for Bar Owners
While a small business loan can help you fill a cash flow gap or 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.
- 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 funds to help 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 for your small business, be sure to look 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, our experts have hand-picked the top small business loans for bar owners, simplifying the process for you and helping you find the best rates and terms available today.
*The required FICO score may be higher based on your relationship with American Express, credit history, and other factors.
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About the Author
Written by: Page Grossman
Page is a freelance intentional lifestyle writer who has written financial content for Fundera, Zeni, Incfile, FamFi, and Zendesk.
More about me
Reviewed by: Sarah Brooks
Sarah Brooks is a personal finance writer and editor with more than 10 years of experience. She specializes in personal and business loans, mortgages, auto loans, and credit cards.
More about meRelated Loan Picks
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