How To Get a Loan For A Bar or Lounge
Opening up your own bar is undoubtedly an exciting dream. If you enjoy going out and enjoying bars and other nightlife establishments, you certainly understand the vibrancy of these spaces. Consequently, the opportunity to manage and design your own space may seem particularly appealing.
The process of getting into the industry may seem daunting — and it does indeed take some research, planning, and money. But with some effort, it is possible to open the Florida bar of your dreams.
Your Four Best Options for Funding a Bar
Obviously, one of the first concerns you might have if you want to open a bar is determining how to afford it. The startup costs for a new bar can be pretty high, depending on the bar’s size, and the prospect of coming up with that much cash can be ominous.
But there are options. Whether it is a loan, various grants for opening a bar, or other possibilities, it is often feasible to find a way. Read on to learn about four solid options for funding a bar.
1. SBA Loans
SBA loans are one of the most common loans used for starting new businesses. They are backed in part by the Small Business Administration and are specifically geared towards entrepreneurs, often carrying correspondingly low rates.
You may be wondering: “Can you get a loan for a bar?” The answer is: Yes, you can! SBA loans for bars work just like SBA loans for other businesses. Of course, they require extensive paperwork and documentation. If you have a troubled financial history or a low credit score, you may have a more challenging time securing an SBA loan.
Some type of collateral will also be a factor in most SBA loans. One useful option for bar owners is to use their liquor license as collateral to obtain a loan, thus ensuring your lender of their investment value.
2. Equipment Financing
From kegs to sinks, to fridges, to countless other appliances, bars require a lot of equipment. If you’re sitting around wondering, “how do I get a loan to buy a bar?” and you cannot secure an SBA loan, it may be worth considering an equipment loan.
These loans tend to be self-secured by the value of the equipment; in other words, the purchased equipment acts as the collateral. These types of loans can be enormously helpful in raising the capital to cover the substantial expenses of creating a new bar.
These days, crowdfunding — raising money from private donors — is employed more and more frequently to fund businesses. While grants for opening a bar can be hard to come by, crowdfunding can function as a similar approach.
Whether it is through gifts or investments, raising money from friends, family, and the wider community can sometimes be a great way to start a bar. This will help generate a spirit of involvement in your bar among your wider circle while assuring you or a solid support base when you start your business.
4. Personal Loan
If you are unsuccessful in applying for a business loan, it may be worth looking at a personal loan. A personal loan will be lent based on your personal financial history, and so the criteria will be different from that of a business loan. While a personal loan may not be large enough to cover the full cost of opening a bar, it can still provide needed funding as you get started and serve as an important part of your funding plan.
5. Liquor License As Collateral
A liquor license is a valuable asset, and in Florida, they are useful for acquiring loans. The market value of a liquor license can vary according to the geographic location of the business. In areas where the number of licenses may be limited, the market value of a license may likely be much higher. Lenders providing financing to a business involved in the retail liquor business may be willing to include the liquor license as part of the collateral pledged to secure bank financing.
Make Sure You Can Obtain Permits and Licenses
Wherever in Florida you are looking to open your bar, obtaining all necessary permits and licenses is imperative. For some entrepreneurs, this can be the especially tricky part. There are varying types of alcohol licenses — including 2COP beer & wine licenses, 2APS beer & wine licenses, 4COP/SFS licenses, and 4COP-QUOTA licenses — plus other relevant permits that you may need to consider.
Even if you already have the grants for opening a bar, the money is only one step: you also need to meet all necessary legal requirements.
Opening a bar, getting funding, and meeting legal requirements amounts to a challenging process. Fortunately, Beverage License Specialists are ready to help. We can help you navigate the confusing licensing process in Florida, including license financing. Ultimately, we can help make your dreams of owning and operating your own bar a reality.
Don’t wait! Contact Beverage License Specialists online today, or call 954-908-6012.
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