Nightclub financing is largely available and dependent upon the specific loan request that is being made. In the past, Nightclub owners have relied on banks and institutional lenders for conventional loans, SBA loans and asset based loans to grow their Nightclub; however in today's day and age, roughly 80% of all Nightclub owners get denied bank financing for one reason or another. As with all the variation of Nightclub finance options, there is also a wide range of lending criteria that goes along with each loan type. The Nightclub loan options that may seem the most prudent, also come along with the most stringent underwriting criteria. There are various loan purposes to consider as a borrower depending on whether the Nightclub owner is looking to purchase an existing Nightclub, seek leasehold improvements, remodel, purchase inventory, liquor, sound equipment, hire DJ's, etc.. When it comes to Nightclub financing, Nightclub owners will face several decisions in regard to which loan products to target and which will make the most sense for their Nightclub business.
Which loan product is right for my Nightclub?
There are several Nightclub financing programs that have been used to finance all types of Nightclubs. Nightclub owners with impeccable credit are able to received fairly competitive loan rates and terms, with interest rates generally ranging between 5.75% and 8.75%. Unfortunately, most Nightclub owners and all small business owners alike, do not qualify for bank financing for one reason or another. Luckily, there are many other options to obtain Nightclub working capital. There are also quick close products, like a merchant cash advance, cash flow loan or revenue based loan, that have higher effective interest rates, but require minimal paperwork and no collateral. There are several loan products that nightclub owners should consider for Nightclub financing, including:
SBA Loans ($50,000 - $350,000)
Small Business Administration Loans are generally the least expensive financing option for small business owners. The SBA 7(a) loan is the Small Business Administration’s most popular product and offers a flexible sum of cash that can be used for anything from managing daily operations to purchasing new products and refinancing high-interest loans.
- Least Expensive Financing - It would be tough to beat the low rates of SBA loans. SBA is an excellent option for Nightclub owners looking to keep financing costs down.
- Great Financing for Growth - If your primary goal is to grow your Nightclub, getting an SBA loan is an excellent way to reach that objective. You get the funds you need on manageable terms.
- Funds in as fast as 7 days after the application is completed!
Small Business Term Loans
Fully amortizing up to 5 year terms. Ideal for Nightclub owners with large single purchases or need to refinance debt. Fund marketing efforts, open new locations, or purchase equipment; all while building your business credit. What’s more, term loans can be funded in as little as 3 days and require less stringent underwriting guidelines than the SBA.
Unsecured Business Line of Credit
Unsecured credit refers to loans or lines of credit where there is no collateral to back the loan. Although this type of lending is possible for a Nightclub, it is considered risky for lenders. The Nightclub owner's personal financial strength as well as the business cash flow needs to be strong in order to qualify for an unsecured line or loan.
Revenue Based Loans
A revenue based loan could be your Nightclub's lifeblood and provide it with several financial benefits. When your Nightclub is growing, chances are you'll need an injection of cash to continue its growth. Bank loans are often times too restrictive, time intensive and highly challenging to obtain these days. In this situation, a revenue based loan may be the best solution. If you use it wisely, a revenue based loan could do wonders for your Nightclub.
Merchant Cash Advance
A Merchant Cash Advance (MCA) can provide Nightclub owners with an upfront fixed amount of cash in as little as 24 hours. The funding amount is based upon a percentage of the businesses credit card receivables or daily cash balances using historical credit card receipts and/or bank statements to determine the initial advance. The business pays back the advance, plus a percentage, often referred to as a discount factor, from a portion of their credit card receivables or cash available plus a percentage which is often referred to as a discount factor. The remittances are drawn from the business customer on a daily or weekly basis until the obligation has been met. An MCA is not technically a business loan, and as such MCA's are not limited in what rates they charge or what terms they establish and therefore often have high interest rates. For this reason it is very important for a business owner to be completely aware of how the MCA product works and how it could affect their business. MCA's are good options for Nightclub owners who may not have strong credit but have lots of credit card activity or steady cash flow and need financing quickly.
Cash Flow Loans
Even if your Nightclub is growing, you may find yourself needing extra cash to cover day-to-day expenses such as payroll, rent and inventory, or to pay for short-term projects that could grow your revenue in the long run. Uneven cash flow is one of the biggest challenges of Nightclub owners. For this type of business financing, lenders provide you funds and use your future expected cash flow as collateral for the loan. You’re essentially borrowing from cash that you expect to receive in the future by giving the lender the rights to a predetermined amount of these receivables. These are primarily used for working capital or take advantage of short-term ROI opportunities. Your credit scores will usually be checked, but they play less of a role. As the name indicates, the lender is more concerned with inspecting your cash flow (usually bank statements) to approve your application. Turnaround time is another great feature of a cash flow loan, as funding usually takes place in a matter of days.
Bad Credit Nightclub Business Loans
Catering to Nightclub owners that have cash flow issues or a history of liens, judgments, and bankruptcy. Get up to $1 Million to grow your Nightclub in as little as 24 hours, regardless of credit!