Unleashing Capital to Keep the Good Times Rolling
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Unleashing Capital to Keep the Good Times Rolling

Explore alternative funding options for your Nightclub or a Bar

A group comes to you, the nightclub owner, and one of the friends mentions that she had a fun night with great entertainment. Another friend loves the ambiance, the drink selection and inquires about reserving the VIP space. These moments are rewarding and remind you of why you started your club. You enjoy picking the best bands, stocking the bar with unique craft beers and having fun.

Owning a nightclub also comes with unique challenges. The business is cyclical as people spend funds in entertainment only when their disposable income allows. When an economic downturn occurs, people have less disposable income and stay home instead of going out. Nightclub and bar revenues decline. Failure rates are high for nightclubs and bars. According to Nightclub and Bar magazine, eight out of ten nightclubs will fail during their first year of operation. Also, nightclubs are open only two or three days per week on average, which reduces days available to make sales. Fixed costs like rent or mortgage are charged monthly even though the establishment is only used for part of a month. Employee turnover is high, which in turn increases hiring and training costs. Employees see working at a nightclub as a way of making easy money and having fun. They are also willing to leave if they find another nightclub or bar that will pay them more. Time that you as owner could be using to attract patrons and promote events is instead spent in training replacements for staff. Advertising and marketing expenses are high as the club needs to inform patrons of special events and changes in entertainment lineup. Your goals as owner include differentiating the club from its competitors, attracting patrons that value a unique experience and promoting patron loyalty.

Both bars and nightclubs have unpredictable revenue streams. You, the owner, may need additional funds to execute activities that will help you meet your goals. Some examples include:

  • Covering fixed expenses: When business is slow, financing may be needed to cover fixed costs like rent, taxes and operating license fees that are required for continued operation.
  • Covering variable costs: Sometimes current cash flow may not be enough to cover payroll, food, beverage and utilities. Paying suppliers promptly is important as late payments adversely affect your credit.
  • Expanding: Includes opening new locations, redesigning existing space to increase occupational capacity by fitting more tables or building a new bar area or adding a stage.
  • Upgrading and maintaining facilities: An inviting environment is a central part of a trendy ambiance and encourages repeat attendance by patrons. Furniture including bar stools, chairs and light fixtures are common items that need periodic replacement. Clean bathrooms, well-kept exterior and fully functional bar and kitchen equipment are crucial to creating a positive impression on patrons.
  • Advertising: Additional capital may be required to promote special events, VIP area and entertainment details to attract new customers. Also, you can entice current patrons to return with rewards such as a free drink after buying a certain number of drinks (e.g. 10) or a discount on VIP area reservations. These rewards come as a cost and need to be advertised too.

Obtaining bank financing with affordable terms is difficult for bars and nightclubs as they do not have significant assets to use as collateral, revenues are volatile and profit margins are low. Most nightclubs are small businesses and loan amounts are usually only a several thousand dollars, which banks do not see as profitable compared with larger commercial loans. The application and approval process for banks can take weeks or even months. Extensive paperwork proving financial stability and personal guarantees are common requirements.

Excel Capital Management can provide you, the nightclub owner, with alternatives to traditional bank loans. One solution is working capital or business funding offered through our various funding platforms. Eligible businesses need to be operating for a minimum of three months. Benefits of obtaining business financing through Excel Capital Management include:

  • Little or no collateral required
  • Flexible repayment terms
  • Minimal credit requirements
  • Fast approval times (generally 24 – 48 hours)
  • Streamlined paperwork requirements
  • Full discretion over proceeds from funding
  • No application fee and no upfront fee’s
  • No business plan required
  • No personal guarantee required

Having less than perfect credit makes getting loans more difficult, particularly for nightclubs that do not have significant collateral or a steady revenue stream. Excel Capital Management offers merchant cash advances as a business financing alternative. This type of funding is particularly helpful for nightclubs looking to cover business expenses like rent, utilities or payments to food suppliers that have short repayment periods. Advantages of merchant cash advances include:

  • No minimum credit score to qualify.
  • No collateral required to secure financing. Most nightclubs do not have enough collateral to back a traditional asset based loan.
  • No personal guarantees required
  • No fixed payment burden. Excel Capital Management purchases a small share of the nightclub’s gross daily revenues to provide capital. Therefore, if business revenues are down, sale purchase amounts decrease saving your business money and reducing the amount of funds that are collected towards the funding.
  • Sales purchases are done daily and automatically through split withholding. The credit card processing company collects the corresponding percentage of your credit and debit card sales and sends it to Excel Capital. Similarly, Excel Capital receives an agreed upon percentage from your cash balance through automatic withdrawals from your bank account. Split withholding is convenient for you as it eliminates the need to write a check.
  • Lower cash flow impact. The merchant cash advance is collected through small daily transactions instead of having one larger monthly payment. Timing allows for more consistent fund availability during the month as opposed to having some days with less cash available due to a large fixed loan payment.
  • Complete flexibility on the use of funding proceeds. You can use the funds for anything including working capital, expansion or advertising.
  • Processing and approval time is shorter relative to traditional financing. Funds are typically released within three to four business days.
  • In some instances timely deliveries of purchased receivables are reported to credit bureaus, which can help improve your business credit rating.

Your nightclub must be operating for a minimum of three months and have at least $10,000 in monthly gross revenues to qualify for merchant cash advance funding. Merchant cash advances do not come with extensive documentation requirements, stringent credit standards and weeks of processing time associated with bank originated business loans. However, this solution may cost more than a traditional bank business loan.

Excel Capital Management has an easy and straightforward process to explore and implement financing solutions described above. Approval rate on all applications received is over 90 percent. The process consists of four steps:

  • Complete a one page application and include bank and credit card statements. A report will be sent to you, the nightclub owner, listing which funding alternatives your business qualifies for in 24 hours.
  • Work with one of Excel’s funding specialists to choose funding that completely meets your needs and budget after your financing options are approved.
  • Obtain final items required to complete the funding process and fund release. Excel Capital Management will work with you to expedite document execution.
  • Excel Capital Management will typically release funds within 48 hours. Proceeds can be used immediately after receipt. Most businesses are eligible for additional financing within 90-120 days after the first disbursement provided by Excel Capital. This allows a constant cash flow stream to work for your business needs!
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