I'm Looking for Possible Ways to Fund a Bar?

Business lines of credit 3% fixed, no personal guarantees, no personal credit required, no liens on property. Any loan amount

Jason,

There is a reason for many bars being self funded. Start up - Themed bars can be very difficult to get funding for as lenders have been dealing with higher default rates therefore eliminating many of the lending options out there.

I will say there are several options available but it will be personal credit based. How is your personal credit? Just know the better your credit the more options you will have available. Please advise.

Jason, My background includes over 28 years of investment banking with regional broker/dealers as well as 10 years of commercial real estate and business loan broker experience. Bank loans for business opportunities are available; however, borrowers need to meet certain criteria in order to qualify for a bank loan that is offered at bank loan rates with bank terms. Call or email so that I can work with you to determine if your request will qualify.

Also, please be very leery of so called business loans that are advances against your business credit card receipts. These loans are effectively unregulated and are the "new" hot play for boiler room operators. The effective interest rate on many of these loans is often times 40% and greater. Credit card advance loans are like that old TV commercial for a bug trap, you can enter but you can never leave.

Sincerely,

[email address]

Depends how much groundwork you have completed. Vendors, blueprints working plans, personal financial information, previous experience in the industry. We would be interested in seeing how much you have accomplished toward your dream.

[email address]

We do offer lending but you must be in business for a minimum of 6 months. We also offer lines of credit. I would be happy to discuss further with you if your interested.

Are trying to find an existing bar or open a new bar.

refi your home and pull cash out.

Hello Jason that an awesome question I am into KulaBrands a platform where new ideas and products get fund it I suggest you join us and you will be able to submit your project to the community am sure Peter Gantner would love your idea I would love to send you info by email.

Thanks

Modesto Calder

Funding any bar or restaurant is a tough sell.

If you have a track record (preferably a good/successful one) in similar ventures, think about some type of private or quasi-public offering - and dog-and-pony the heck out of it. Crowdfunding is also a possibility if you don't need to raise a vast amount of money.

If this is your first rodeo, private funding will probably be limited to your 4Fs (Family, Friends, Fanatics, or Fools). Rich Uncle Ernie (who believes you are a genius) is probably your best bet.

Lender financing will be scarce as a general rule. In 45 years of private equity work, we have managed only one bank loan for a restaurant "startup" operation -- that one was a takeover of a 50+ year old chain, was launched by a family that is considered restaurant royalty, and had already raised something in excess of 3.5 million form passive investors.

Bear in mind, if you go the private equity route -- a business plan generally will not fulfill your disclosure obligations under most state (all any Federal) securities or blue sky laws. You need both a business plan and a formal private offer memorandum. Funding the venture using only a business plan is risky if you go outside your immediate circle of acquaintances or if some investors will be passive. Think of it this way: The business plan is about what you hope will happen -- it's about the dream. The Placement Memo is about all the bad stuff that could happen along the way -- its about CYOA.

If you are buying the building and the bar (or buying the building to startup your bar) think about breaking the equity participation into two pieces -- the bar operation, and the building (whose anchor tenant is the bar). Commercial realty is usually a much easier equity sell than any business venture. Offering the interests separately allows investors to choose whether they cross-collateralize the high risk venture with the (relatively) low risk one. (What we usually find is that there are far more investors in the building than in the bar -- but their input lets the bar-entrepreneur concentrate their own liquidity in the operational end and still participate in the earnings and appreciation of the real estate.

Joe Acosta's (Dominion Capital Group) list has some interesting ideas... some of which I have never seen used by restaurant or bar startups. In particular, pre-selling memberships is intriguing, but I have no idea how you would go about doing it. We've done a variation on this with motion pictures -- pre-selling distribution rights in (mostly) foreign territories.

One final comment - I promise: Private Investors like to see that you have some personal "skin-in-the-game." Keeping your "personal investment as low as possible" is often incompatible with that. This is particularly applicable to the bar offer... you need to have something invested that prevents you from walking away if it is harder than you think it will be (and, rest assured, it will be). If you syndicate the bar and building separately, put your own liquidity in the bar. Real estate investors expect far less equity participation from the managing member than do bar investors.

Hi Jason - I have done equipment financing for 27 years now and I have financed many start-up businesses. I presume that this business is a Start-up. If I am wrong, please let me know. Anyway - the equipment can be financed on a 5 year term to make the payments affordable. If you need working capital or funds to build out the bar at the location you have picked, then I would recommend an SBA loan. I believe others have responded to you about SBA as a way to consider funding your project. The SBA does finance Start-ups. You didn't say what State you are in. It is also important to tell people if you have excellent credit or so/so credit. Financing for this type of venture requires excellent credit because there is a high default rate in the food/beverage industry. That is always helpful when posting on Alignable.