Bar and Tavern Merchant Cash Advance & Business Funding
Bars and taverns can get a merchant cash advance based on card sales, which make up most of their deposits. Funders separate tips from sales, because tips paid out to staff aren't revenue. National staffing is lowest in winter and highest in late summer. Size the payment on a January, not an August, and be careful stacking advances in a card-heavy business.
How do funders read bars and taverns?
Funders read card volume, the tip share and how deep the slow months go. A bar with food sales may read closer to a restaurant. See also restaurants.
How does money come in for bars and taverns?
Most sales come through card batches, with some cash. Card tips land in the batch and then go out to staff, so the gross batch overstates what the bar keeps. Distributor payments for beer, wine and spirits go out on their own schedule and show as large debits.
Which months are slowest for bars and taverns?
This table shows how many people private drinking places (NAICS 722410) businesses employed each month, as an index where the year's average is 100. It comes from the Bureau of Labor Statistics Quarterly Census of Employment and Wages, the most recent full year available. Staffing is a stand-in for how busy a business is. Deposits can move more or less than headcount, so read it as the shape of the year, not your numbers.
| Month | Staffing index (average = 100) | |
|---|---|---|
| January | 97 | lowest |
| February | 97 | |
| March | 99 | |
| April | 100 | |
| May | 101 | |
| June | 101 | |
| July | 101 | |
| August | 102 | highest |
| September | 101 | |
| October | 101 | |
| November | 100 | |
| December | 99 |
The low point is January at 96.5 and the high point is August at 101.6, a swing of 5.1 points. The pattern follows the patio season in much of the country.
| Quarter | Total payroll index (average = 100) |
|---|---|
| Quarter 1 | 94 |
| Quarter 2 | 101 |
| Quarter 3 | 101 |
| Quarter 4 | 104 |
Payroll by quarter can rise at year end for reasons like bonuses and overtime, not only more work.
What do bars and taverns use merchant cash advances for?
- Inventory before a big event or season.
- A patio or kitchen build-out.
- Repairs to coolers, draft systems or ice machines.
- Covering a slow winter stretch.
- Licensing and renovation costs.
What does an advance payment look like in a slow month?
Staffing barely moves through the year here, so the slow month to plan for isn't seasonal. None Say a business like yours deposits $70,000 in an average month and carries a fixed payment of $7,000 a month, 10% of that average:
| Deposits | Fixed payment | Share of deposits | |
|---|---|---|---|
| Average month | $70,000 | $7,000 | 10.0% |
| A month 20% below average | $56,000 | $7,000 | 12.5% |
A fifth less in deposits turns a 10% payment into 12.5%. Keep a cushion for it, or ask how reconciliation works before you need it.
Which funding options fit bars and taverns?
Each page runs one option against this industry's slow months.
Same-day merchant cash advance for bars and taverns
Money the same business day for an urgent cost, with the fixed daily debit measured against a slow month.
Second position MCA for bars and taverns
What a second advance adds on top of the first, and what both payments take from deposits in a slow month.
MCA consolidation for bars and taverns
One payment in place of two, with the share of deposits before and after in a slow month.
Revenue-based financing for bars and taverns
A remittance that moves with revenue, so a slow month sends less, and the months to reach the repayment cap.
Business line of credit for bars and taverns
A draw sized for a slow month, repaid in thirds, with the interest on the balance worked out.
Run a business like this?
Tell us your slow months up front and we'll look for funders that size for them. Call 877-FUND-654 with any question. We call you back, usually the same business day, and we always talk with you before we shop your file.