Banks are very reluctant to offer small-business loans for bars that have yet to open. This type of business is highly risky to start, and it usually takes years to turn a profit. In addition, the government is not likely to provide grants to start up a bar due to the association with alcohol usage. There might be some grants available for minority or female business owners to start the business, but it will be more challenging unless the business also has a restaurant section.
Getting a Loan for a Bar
Develop your business plan presentation to show to banks. You probably will qualify for a loan sponsored by the Small Business Administration (SBA). These loans are subsidized by the federal government but provided by private lenders. Despite this, it's difficult to get approved for a loan to start a business unless you already have an existing similar business in operation. If you have experience running bars, restaurants or nightclubs, include this in your application along with relevant information about profits over the past five years.
Apply for a business loan from a bank to get your bar started. You will have to present your plan in detail, along with an itemized budget for how you will spend the funds in the loan. You will be more likely to gain approval if you can provide a substantial portion (ideally a majority) of the funding for the business yourself without going into further debt. If you have a strong personal credit rating, you also might increase your chances of winning approval by co-signing the loan.
Use the funds provided by the loan to start up your business. If you receive a loan subsidized by the SBA, you might have to maintain your eligibility status to ensure that you don't run afoul of regulations. Review the link to the SBA website below to determine your eligibility.
Grants for Bars
Search for grants offered in your area for small businesses through the official government grants website located in the Resources below. The grant application process is demanding and complicated. If you are female, a minority or opening a bar in an economically depressed neighborhood, you might be more likely to qualify for government grants.
Apply for a grant for which you are likely to qualify. Explain how the business will provide an economic stimulus to the community. Emphasize the jobs that will be created and the potential increase in property values that the bar will bring. Put a point on the tax revenues that will accrue to the government from starting the new business.
Follow the terms of the grant as closely as possible. If you fail to spend the money as you have indicated on your grant application and in all communications with the government regarding the grant, you might be liable for severe penalties.