Alternative Small Business Funding for Bar Reopening After COVID-19 Shutdown

Being a small business owner at the best of times is difficult, especially in an industry as competitive and complex as food and beverage. When the restrictions started rolling out related to the COVID-19 shutdown, bar owners were hit especially hard and many were left without direction or clear options to try and mitigate the losses sustained. No small business can ignore the financial impact of such a rapid, unexpected interruption to daily operations.

For some small business owners, their entire livelihood has been impacted by this unpredictable crisis. Luckily there are options available to you to help through these tough times and to make things a bit easier we’ve compiled some of the better ones here. So, let’s dive in and look at these options in detail so you feel confident about your next steps.

Assessing The Financial Impact

The first thing that you need to calculate is the true impact the shutdown has had on your business. With something of this magnitude it isn’t a straight answer of how much money you’ve lost or what revenue you’ve been unable to make, it’s also about the impact to staff retention, maintenance that may need to be performed, and hidden expenses that don’t occur during regular operation. Many establishments had to lay off their employees. Will your previous employees be able to return or will you need to spend the time and energy recruiting more? What are your costs to do so? Do you pay to advertise open positions on job websites, if so what is that expense going to look like? Will the need to train new staff slow your ability to operate at a full (or as full as allowed) capacity?

Also, consider your food and beverage menu, are there things that you need to replace before your bar reopens that are usually done every few months, like vermouth or frozen items that might now be past their prime? What will your wastage expense look like to replace all of these things? Do you have equipment that is usually maintained by employees that now has not been serviced in a few months, do you need to have a professional come in and do maintenance before you reopen your bar? By taking all of these things into account you can calculate your total loss during the COVID-19 shutdown accurately.

Re-Opening Plans

Another important part of calculating your losses and what capital you will need to reopen will be looking at what is required of your establishment. You will need to take the time to research the guidelines in your area and make sure you comply with social distancing practices and safety measures. In some cases, you may need (or want) to be able to provide masks and sanitizer, even if it isn’t a stated guideline, if other establishments in your area are offering these incentives you may want to consider the same so factoring that cost in will be important. Adding the FRLA (Florida Restaurant & Lodging Association) to your bookmark tab also won’t hurt as they have a comprehensive collection of all advocacy & industry alerts as well as operating restrictions and executive orders.

How Can You Obtain Funding?

Once you know what the scope of the financial impact has been and roughly how much you’re going to need to reopen you should have a good idea of what you need, to plan for the future in terms of finances. It might seem a bit daunting but know that you’re not alone. Many small business owners will need financial help to reopen, understandably so. When looking at a budget and seeing that the overhead expenses have not gone anywhere and need to be paid, but you haven’t been able to make any money it can be a scary and disheartening moment. Some business owners might be dealing with bad credit or even be considering declaring bankruptcy, but I would urge you to try some of the steps below before doing anything drastic.

Small Business Funding Bank Loans

The first option that comes to most of us when we need a large amount of capital is to take out a loan. If you have a good relationship with your bank or lender, own the commercial property your business is in, or have great credit, this could be your simplest option. High credit scores often mean lower interest rates given by banks, and having a good customer history or relationship usually means they will be more willing to work with you to find attractive offers. The downside is these can sometimes take a long time to get approved based on the bank and the loan application. Further, if you don’t have good credit or haven’t had any income for the last few months the banks may be unwilling to lend to you. Government loan options are along this same line, the Payment Protection Program (PPP) is a great initiative but requires a lot of paperwork and imposes limitations on the funding you receive. Before you apply make sure you carefully read and understand the terms and conditions to avoid any issues.

If these conventional options aren’t for you that is entirely fine because we’re going to be diving more into alternative small business financing options in this article.

Small Business Funding Merchant Cash Advance

One of the easiest ways to secure fast cash for reopening is through a merchant cash advance. The criteria to apply is a FICO score of 500, monthly revenue over $10,000, and the ability to prove you’ve been in business for at least three to six months. If you can meet these criteria you can receive $5000-$500,000 and you repay this loan through a percentage of sales. The application takes 48 hours to be approved and if approved you will have the money in two to five days.

Small Business Funding Local Relief Funds and Grants

There are several local and national initiatives and funding options to help get small business owners, and bar owners specifically get back on their feet. Businesses located in Miami-Dade, Broward, and Palm Beach counties, that are independently owned and that have participated in the South Beach Wine & Food Festival are eligible to apply and receive support for example. It takes a bit more time and research as every area is different, but hundreds of private relief funds have been set up just like this one across the country, it’s worth applying to any in your area you qualify for.

Small Business Funding Social Media Crowd-Funding

If you’re a bar with a dedicated clientele, it may be worth taking advantage of the crowdfunding resources available through our connected social media web. Many customers are willing to support their local small businesses, especially if it is an establishment they are excited to see re-open. It doesn’t hurt to use your re-opening plan to start a go-fund-me, or to fundraise through other creative ideas like selling food and drink pre-paid packages to patrons for establishments that want to get a bit more creative.

Small Business Funding Secured and Unsecured Business Loans

An unsecured business loan is an arrangement that means you won’t need to put up any of your own assets or collateral against the loan. Repayment terms are also flexible and usually based on your revenue which is a good option for times like these when you may not be able to open to full capacity immediately. These loans take two to five business days if approved. If you have bad credit you may not be able to take an unsecured loan, but a secured business loan may still be an option. This does mean putting up some collateral, but it also might mean a more attractive interest rate and allow you to get cash faster than an unsecured loan.

What Small Business Funding Option Is Best For Reopening My Bar?

That is entirely up to you! Even beyond the ones listed here, there are many options available and new funds and initiatives becoming available every week. The important thing is to not get discouraged, do your research, and don’t hesitate to apply for any and everything you qualify for if it is reasonable to do so. Pay close attention to your reopening plan and weigh the pros and cons of each option you want to explore.

If you’re still wary, it’s never a bad idea to talk to a professional about your options and the wonderful team at South Florida Funding Group would be more than happy to help you and give you more information so you can make the best choice possible.

Conclusion

The COVID-19 shutdown has caused a significant amount of loss for bar owners, and the costs of reopening can be daunting as well. Luckily there are numerous funding options available to you, and more becoming available by the days and weeks. It doesn’t matter if you have bad credit for many of these options, and more than a few of them understand the importance of getting you fast cash. Applying for alternative small business financing may be the best option for most bar owners to have their needs met without needing to jump through the hoops of a conventional lender. To get started right away and have a professional walk you through all the nitty-gritty, contact South Florida Funding Group to get more information and get your bar reopened, for good!  Qualify Now- Click Here For Application