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Sports Bar Loan

Sports bars are the perfect place for people to get together, whether they want to enjoy a major sports event or just grab drinks with their friends. This is a thriving business, one that can be very difficult to get into especially with bad credit or bankruptcies. Alternative financing solutions can be exactly what you need whether you are trying to start your sports bar business or need to get through a difficult time caused by a business emergency, alternative financing can be exactly what you need right now.

Getting a Sports Bar Loan

The idea of opening a sports bar seems appealing, but it’s more complicated than just opening it up. There are some things for you to consider when you are trying to get a loan for your sports bar. First of all, the sports bar itself will often have significantly higher startup costs than you may think that it does. You may just think that opening up a sports bar with a restaurant or a larger brew pub in a prime urban location will be the only expensive venture. While these more complex bars can have seven figured startup costs, even a smaller local neighborhood bar can cost you $20,000 in startup costs.

It can even be expensive just to buy a bar, with a lot of things that you need to consider before you jump into purchasing the sports bar. You may need to get alternative financing options like a line of credit or equipment financing. The back-end business of owning and running a sports bar is far more complicated than you may realize. This doesn’t necessarily mean that you should give up your dream of owning your own sports bar, but you really need to consider whether or not this is something that you actually want to do.

Impressing Investors

One option that people often turn to when it comes to alternative funding is finding other investors for their sports bar. This can be a particularly appealing option for people when they don’t have any money to put down by themselves. But, if you are going to try finding an investor to help you out, you need to find a way to impress them so that they are willing to invest in your idea. This means that you need to have a careful and detailed plan for your sports bar. Some ways to impress investors include:

  • Coming up with a unique idea that helps you stand out from other local sports bars.
  • Developing a stellar strategy that offers a realistic timeline to show that there is a plan for their money.
  • Creating a reasonable and well-developed business plan.
  • You need to pick a location that will be perfect for your sports bar, someplace that is both easily accessible and can get the attention it needs to thrive. It should also have plenty of parking.

Once you have this all planned out, you can approach investors with the hope of getting the money that you need to open a sports bar.

Alternative Financing Options

Unfortunately, there is no guarantee that you can find an investor that will give you any or all of the money that you need for your sports bar. If that’s the case, you may need to rely on alternative financing to get the funding that you need for your business. There are quite a few options here that you can consider. This section will take a look at some of these popular alternative funding options.

SBA Loans

SBA (Small Business Association) loans are a top choice when it comes to funding for not only your bar, but various other entrepreneurial aspirations that you may choose to pursue. There are a variety of different options available from the SBA, including when it comes to flexible repayment terms. SBA loans are a great option to consider because they let financial institutions lend money with reduced risk to small business owners or people who aspire to be. This is less risk for the financial institution because the federal government will guarantee to repay a decent chunk of the loan in case the borrow defaults on the loan.

Because the government guarantees such a significant portion of the loan, these loans come with low interest rates. Another benefit to the small business owner is that they can borrow more money than they would traditionally be able to with a bank. This means that they won’t need to take out multiple loans if they qualify for the SBA loans.

SBA 7(a) loans are the most common option that people choose because it allows the borrower to qualify for loans up to $5 million that can be used for anything, including inventory and purchasing equipment. This is also a very flexible loan, giving you the flexibility that you need when you are trying to open your bar. You are able to get whatever you need for your bar due to the wide range of acceptable uses for the SBA 7(a) loan.

It’s important to know that while this is a great option for funding, it can take a great deal of time and effort to get SBA loans. Be prepared for it to take several weeks for the lender to process all of the documentation. The documentation should not only include the financial history of your business, but also your financial records. If you have any co-owners, you will need to submit their information as well.

Which type of paperwork will you need to submit? Some documentation that you will need to submit for your loan include:

  • Background history for you and any co-owners that you may have. This history includes any criminal records and previous addresses or names.
  • Resumes for you or other co-owners also applying for the loan.
  • The sports bar’s business plan.
  • Documents that verify the age and size of your business.
  • If applicable, your business’ balance sheets.
  • Your personal credit report, and the personal credit report of any co-owner.
  • Both your business and personal tax returns.
  • Debt schedule for any outstanding loans.
  • Any loan collateral, if applicable.
  • The legal documentation for the registration for your business with any governmental agencies in the state, both state and federal.

Qualifying for an SBA loan can be an excellent option for getting the funding that you need for your sports bar. You can get better interest rates and longer terms, making the monthly payments more manageable for businesses. The downside is that there is a lot of paperwork involved and you may end up waiting a while to hear back about whether or not your loan application was accepted.

Equipment Financing

Another option is funding that was specifically made for the furnishings and equipment that goes into your sports bar. You will need to purchase items such as brewing equipment, draft lines for the beer, ice boxes, sinks, tables, and chairs. You can save money by purchasing these items used, but even used equipment can be very expensive.

This is where equipment financing comes in. This is an excellent option if you don’t qualify for an SBA loan or if you don’t have the time to wait for the approval for an SBA loan. The lender will offer you up to 100% of the price of the equipment, without the necessity of any other collateral. Your collateral is the equipment that you are using the loan to purchase. If you don’t pay back the loan, the lender will take back the equipment.

One reason why this is a great option for sports bar owners is that the timeline for approval is faster and the process is much easier than going for a traditional loan or an SBA loan. Another reason why this is an excellent option to consider is because they are self-secured. The value of the equipment is the collateral, meaning if things happen you won’t have to lose your home or other asset. Before applying for this type of financing, you should know that if you have bad credit or are opening a new bar (rather than an existing one) you may have to come up with a portion of the equipment cost yourself to get accepted.

Personal Loans

Do you have bad credit so you may not get an SBA? Do you need to purchase something other than equipment? If you answer “Yes” to either of these, you may want to consider applying for a personal loan. Traditional business loans will require the lender to look at the financial history of your company, including the cash flow or credit history. These will also typically require you to put up collateral for the loan, while having strict limitations as to what you can use the money for.

However, personal loans are based on your personal financials rather than your business’. These loans also generally don’t require collateral and there are fewer limitations as to how you spend the money. This can sometimes be the only way that aspiring entrepreneurs can open up a brand-new sports bar. It can be very hard for you to get a traditional loan for your sports bar, especially if you have no way to demonstrate any income and the bar doesn’t have any cash flow history.

Because of this, it’s a very popular choice for people trying to open a brand-new sports bar. Unfortunately, you may not necessarily get a lot of money with a personal loan and you may need to get other types of funding as well.

Raising Money from People (Friends, Family, Investors)

This article previously looked at how you can impress investors and here’s where you put this to use. Investors for your business have been a popular approach for a long time. Private investors, whether they are loved ones or acquaintances, can be a quick way to access the capital that you need without going through credit checks or background history. You can quickly get the money without a hassle.

The problem is that this approach can be very tricky. Anytime you mix money and your loved ones, this can lead to issues especially if the bar goes under. If the bar does fail, you will owe the investors whatever money they put into the sports bar. To avoid any major issues here, it can be a good idea to draw up legal documents regarding investments. You can either create a simple one yourself or you can hire a lawyer to draft up an agreement for you.

Merchant Cash Advance

A merchant cash advance is an option where the loan is paid back from a portion of your credit card sales. As you batch the sales at the end of the day, the lender takes a certain percentage of the daily sales directly. This percentage is based off of the agreement when you accepted the terms of this loan. This type of alternative financing option does have its advantages.

One of the biggest benefits of this option is that you don’t have to worry about making your monthly payments. The payments are automatically paid according to your terms at the end of every day when your credit card sales are processed. This gives you one less thing to worry about and your loan gets paid down without you having to do anything special. Another benefit is that there is a small portion of your sales that is taken every day. Maybe you have a great day where you make $1000, this means that you will often pay about $200 on that day for the loan. However, maybe the next day you only make $100. Then, you would only need to pay $20 that day.

It can be hard to qualify for this type of loan, but it’s a convenient option that allows you to just worry about running your business and not about whether or not you remembered to pay this monthly payment on time.

Business Line of Credit

Business lines of credit is an option where you qualify for a loan of a specific amount of money. However, you don’t have to start making payments until you use this money and you only pay based off of the amount that you actually borrow. You can borrow what you need, when you need to, up to the maximum amount of the loan. What’s great about this option is that once you pay off the loan, you can use it again when you need it.

This can be an excellent option, especially to help businesses who are struggling with some type of emergency including dealing with a slow period in their business.

Business Credit Cards

Business credit cards can be used as you would use a regular credit card. You use it when you need to, such as an emergency run to replace inventory, and then pay it back later. These can be great options but difficult to qualify for.

What’s Next?

Once you have secured the funding to follow your dream of opening a bar, you need to know how to make sure that your sports bar stays in strong financial health. This section will take a look at some advice that can help you better manage your business’ finances.

Be Prepared for the Unexpected

It’s important to always be aware of the various expenses and costs that may come up unexpectedly while you are in business. For instance, what if your refrigerator suddenly gets broken or there’s an issue with your draft lines. These are just a few of the common issues that you should plan for and anticipate. This means ensuring that you set aside money when you can to cover these unexpected situations.

Slow Periods

Late autumn and winter can be slow times for businesses, including sports bars. When your business is slow, this means that you aren’t making as much money and you may end up with problems such as payroll issues. The good news is that there are options like working capital loans or payroll funding that can help hold you over during these slower times by ensuring that you have money to cover these expenses. These are short-term loans that can be much more expensive than other funding options, which is why you should plan for these lean times.

Have a Business Checking Account

It’s very important that you have a business checking account specifically for your sports bar. You need to find a checking account that allows you to have a high number of free cash deposits every month as well as more favorable for frequent credit card transactions. It’s also important that the checking account allows you to withdraw any amount of money regularly, so that you can purchase items as you need to.

Conclusion

If you want to open a sports bar or just help your business through a business emergency, there are alternative funding options that you can consider. When you work with a company that specializes in alternative funding, you can find all of your options in one convenient location. This makes the process easier and less stressful for people who want to open their own sports bar or do what they can to keep theirs open. You just need to find the best option that meets your specific needs.

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The business funding you need when others say No!.

2569 Bay Pointe Dr.
Weston FL 33327

Email:
drew@southfloridafundinggroup.com 

786-544-2700

DISCLAIMER

 The operator of this website is NOT a lender, does not make offers for loans, and does not broker online loans to lenders or lender partners. Customers who arrive at www.SouthFloridaFundingGroup.com are matched with a lender or a lender partner, who offer business loan products or credit repair services.