Why bar financing is its own conversation
Bars are good businesses with strong margins on drinks, but lenders treat them carefully. They see late hours, liquor liability, cash-heavy revenue and an industry where concepts can fall out of fashion. Some banks avoid bars entirely. Others will lend, but only to operators with clean books and a solid track record. Getting financed comes down to finding lenders who actively want bar deals and presenting your bar the way they underwrite it.
What bar owners finance
- Remodels and refreshes: new bar top, seating, lighting, restrooms, a patio or rooftop
- Equipment: draft and glycol systems, ice machines, back-bar coolers, glass washers, POS, sound and TVs
- Inventory: stocking up before a big season, a festival or a major sports schedule
- Liquor license costs where a license must be purchased or transferred, often as part of buying a bar
- Buying an existing bar or buying out a partner
- A second location, the most common growth step for successful bar owners
- Working capital to cover slow months, emergency repairs or payroll gaps
Loan types that fit bars
- Equipment financing for draft systems, refrigeration and AV. The equipment secures the deal.
- SBA loans for acquisitions, build-outs and larger remodels. Bars are generally SBA-eligible when the business meets SBA rules.
- Term loans for remodels and projects with a set budget.
- Working capital loans and a business line of credit for seasonal swings and inventory.
- Expansion loans for opening a second bar.
- Revenue-based financing or a merchant cash advance for urgent short-term needs, with care about cost.
How lenders look at a bar
- Deposits that match reality. Cash-heavy bars sometimes deposit less than they actually sell. Lenders can only underwrite what shows up in the bank account and on tax returns. Depositing all revenue consistently is the single best thing a bar owner can do before applying.
- Liquor license status. An active license in good standing is basic. Violations or a pending suspension can stop a deal.
- Food vs alcohol mix. Some lenders prefer bars with meaningful food sales; others are fine with drinks-only concepts.
- Time in business and stability. Bars with several years of steady deposits have far more options.
- Existing advances. Bars are frequent MCA users, and multiple open advances are a common reason for declines.
- Insurance. Liquor liability coverage is expected.
Liquor licensing in Colorado and Tennessee
In Colorado, liquor licenses are issued under a dual system: the state Liquor Enforcement Division (part of the Colorado Department of Revenue) and the local licensing authority in your city or county both approve. A tavern license, hotel and restaurant license, or brew pub license each carries different food and operating requirements. Changes of ownership and new locations go through the same dual process, which affects timelines for acquisitions and expansions.
In Tennessee, the Tennessee Alcoholic Beverage Commission (TABC) issues liquor-by-the-drink licenses, while beer permits come from the local beer board in your city or county. Local rules differ, including distance requirements and hours, so a second location in a new city may mean a different local process.
Lenders do not issue licenses, but they want to see that yours is active, transferable if you are buying a bar, and accounted for in your timeline.
Bar markets we know
In Colorado, Denver’s LoDo, RiNo, LoHi and South Broadway support dense bar scenes tied to sports, concerts and nightlife, while Colorado Springs, Boulder and Fort Collins mix college, tourism and craft-beer traffic. Mountain-town bars ride ski and summer seasons. In Tennessee, Nashville’s Lower Broadway honky-tonks and Midtown bars run on tourism and live music, Memphis has Beale Street and Overton Square, and Knoxville’s Old City and Market Square follow the university calendar.
See our local pages for bar financing in Denver, bar financing in Nashville, bar financing in Memphis, bar financing in Colorado Springs, bar financing in Aurora and bar financing in Knoxville.
Questions owners ask
Is it hard to get a loan for a bar?
It is harder than for many businesses, because some lenders avoid alcohol-focused, late-night concepts. It is far from impossible. Bars with several years of steady deposits, an active liquor license, clean tax returns and few existing advances qualify for SBA, equipment and term financing regularly. The key is approaching lenders who actively fund bars.
Do lenders finance bars that are cash-heavy?
Yes, but they can only count revenue that shows up in your bank deposits and tax returns. If a bar keeps significant cash out of the bank, the business looks smaller to a lender than it really is. Depositing all revenue consistently for several months before applying is one of the most effective ways to improve offers.
Can I finance a liquor license?
Sometimes. Where a license has transferable value, such as when buying an existing bar, lenders may include it in an acquisition loan. In Colorado and Tennessee, most licenses are issued by the state and local authorities rather than bought on an open market, so financing usually covers application, legal and related costs rather than a license purchase price.
What loan types fit bars?
Equipment financing for draft systems and refrigeration, SBA loans for acquisitions and build-outs, term loans for remodels, lines of credit and working capital for seasonal swings, and expansion loans for a second location. Merchant cash advances and revenue-based financing can fill urgent needs but cost more. Most bar owners use a combination over time.
Can I open a bar with an SBA loan?
Possibly. SBA lenders can finance new bars when the business is eligible and the owner has strong industry experience, good credit, a solid plan and meaningful equity. New bars face more scrutiny than operating ones. Buying an existing bar with a track record, or expanding from a successful first bar, is usually easier to finance.