Safety in the Cards
Finding Funding When the Bank says 'No'

The bar business is one unpredictable sea. Staying afloat and sailing straight requires the right amount of wind at the right times.
    That wind, of course, is money.
    The problem too often is that bar owners find themselves in water that’s just too deep and treacherous — over-extended and having borrowed all they can get their hands on.
    Bank loans dried up, owners saddled with bad credit sometimes turn to predatory lenders and wind up in even worse shape. But in recent times, a new way of getting a safe, quick gust of wind has emerged.

Advancing Business
    “Nightclubs and bars are high risk businesses to banks,” says Jay Keller, CEO of 2nd Source Funding (www.2ndsourcefunding.com). “Banks are scared to give loans to them. Undercapitalization is by far the biggest reason bars and foodservice operations go out of business so quickly.
    “We provide a second source of funding — an alternative method for a company to be able to acquire the funding they need for the growth of their business. This is a fairly new concept of funding; it’s probably two or three years old at its max,” Keller says.
    “The No. 1 industry (using our service) is the foodservice and bar industry. The main reasons why our program is so popular amongst the bar and foodservice industry is because banks view their business as a high risk operation and because typically the owners of these business have bad credit or have maxed out their credit abilities with their banks, and they need more money.”
    For operators wary of anyone willing to give them money when they have bad credit, Keller stresses that what 2nd Source provides is not a loan, and repayment is not a burden.
    “The reason we’re able to give people funding is the way we view their business,” he says.
    “Typically in a bar, most of the transactions are being done with credit cards. For example, if a bar is in business for the past three years, and averages about $100,000 a month in credit card processing, we can assume that this business will continue to produce this amount, if not better — considering most people are taking money from us for growth purposes, whether it’s for a marketing campaign or new equipment or to expand the store.
    “We give the owner unsecured business cash based on his past credit card processing and based on anticipated future processing,” Keller says. “Payback is based on a small percentage that gets deducted from future credit card receipts. There are no fixed terms or payment schedules.

Other Advantages
    “It’s a business-to-business advance, so it does not show up on their credit report or affect them the way a bank loan would affect them, and the funding can be available within 72 hours,” Keller says.
    “Our purpose is to offer business owners, like those in the bar industry, with a funding solution so that their business can continue to grow.”