Business loan – financing bars, cafes , etc.

To open a restaurant, a bar, a bistro or a café, this sector of activity remains popular among project promoters. This kind of trade continues to be unanimous for a very good reason. Customer friendliness compensates for bad business days. Unfortunately, accessing this dream is not a simple task. Large investments, sometimes a large bank loan, await entrepreneurs. Often, the route ends there and the project remains a dream. But have you heard of the business loan or the brewer contract? Let’s find out what it is.

The business loan, the alternative

The business loan is a very common practice in the field of financing bars, cafes, hotels and restaurants . How it works ? The supplier (brewer, beverage wholesaler, distribution group …) helps the distributor (the owner of the café or restaurant) in his projects by granting him a financial loan, material support or services. In exchange, the owner agrees to supply himself with drinks, exclusively at the brewer. In general, the contract lasts 5 years. At the end, the operator retains ownership of all equipment if he pays his debts.

Good to know : one in two establishments in France uses the business loan.

The business loan, WHO negotiates WHAT?

The business loan, WHO negotiates WHAT?

To get to the heart of the matter, here’s what you need to know about the business loan.

  • If both parties agree on a financial loan, the contract will stipulate the amount (up to several tens of thousands of euros) and the method of payments. The owner risks fines if he exceeds the exclusivity heard with his supplier. In the worst case, he risks breaking the contract and repaying the entire loan with penalties.
  • If the contract focuses more on the supply of materials and services, the agreement must clearly state the nature of the supports and the counterparts. For example: the endowment of a coffee machine, beer pump and its cold system, the granting of a license for alcohol, the maintenance of the machines, the renovation of a room …

Good to know : The duration and terms of the exclusivity must be mentioned in the contract. In case of sale of the activity before the end of the contract, the distributor undertakes to have the contract continued by the new acquirer (distributor’s security clause).

What are the disadvantages of the business loan?

What are the disadvantages of the business loan?

The business loan is used as an alternative of choice to the professional bank loan . Unfortunately, it does not only have advantages:

  • Its cost can be very high
  • If the distributor is unable to pay its debt at the end of the contract, it is extended.
  • It favors the big brands.

The secret is in the negotiation

As you have noticed, it is the exclusive commitment of the owner who is the cement of the contract. However, this does not leave the brewer free to act as he wishes. Indeed this one also has obligations towards the owner. It is for this reason that we must specify in the contract the nature of this exclusivity. Do not be afraid to draw the breadth of the brewer’s responsibilities. In other words, be a good negotiator.

During the negotiation, the owner must find the right system as:

  • Get a good quota on the volumes to be sold annually
  • Get rebates from the brewer to keep the price down and stay competitive
  • Request a more flexible exclusivity and be able to sell other brands such as organic drinks or craft brewers
  • Summon a break in the contract in advance
  • Etc.

Business Loans | Your Request in 10 minutes

Business loans are a great tool that you can use to grow financially. If you look at the large and successful companies we will realize that credit and express loans are part of your life as a company. It is very difficult to conceive an exponential growth without the use of extra resources. See

If we did not use the business loans and wait for our business to give the results necessary to reinvest, we would never grow seriously. The business would stagnate at a certain point.

Points to analyze a loan for business

Points to analyze a loan for business

Here, I want to analyze some steps you can take to take advantage of business loans that exist in the market.

Know your business.

Of course you know your business; you know how much it produces you, you know how much you are investing it week after week; You know perfectly how much you are paying for services or how much it costs you to have your employees, etc. The knowledge required to apply for loans for successful businesses is a little deeper.

For example, you should be able to say at the beginning of the year, more or less, how much you are going to sell throughout the year (based on the analysis of previous years). You must be able to predict how much money you need to invest to achieve a certain sales goal. Or how many people do you need to hire to grow what you want?

And while you can make all those predictions, you can calculate costs, expenses and even certain losses that you should be willing to suffer.

Seeing the business with strategic eyes will allow you to know basic elements:

– How much does my business produce a week, a month, a year?

– What works and what does not work in my business?

– How much money do I need to invest to sell 20% more than last year?

– In what part of my business should I invest to get the most out of the money?

– What growth strategies will I use to take advantage of this investment?

– What is the contingency plan in case you are not achieving the goals?

Once you have these clear points, you can apply for business loans with the full assurance that you will get the most out of them.

Investigate business loans.

In Mexico there are several banking and non-banking institutions (financial, microfinance, etc.) that can help you by granting you business loans .

When there is a wide range of options, you run the risk of losing yourself, confusing yourself or of getting tired of searching. This way you will not find the best business loans . But having so many options also gives you the opportunity to search much more and find the best option for you, your family and your business.

In Lugalbanda, for example, we have loans that you can use for different things: going on vacation, paying another debt, dealing with an emergency, investing in your business … It depends on the situation you are in.

Decide and make good history.

Once you have done your research, decide to invest with business loans . We said it at the beginning, in order to grow it is necessary that you invest.

And once you’ve chosen a particular institution, try to create a great credit history with them by paying your dues on time. In this way, they can provide you with greater benefits and will be there to support you whenever you need business loans, personal loans or personal loans .

We will be happy to support you, send us your request today. It will take you 10 minutes and you will have an immediate response.