Business Loans for Wedding Venues: The Top Options

Getting a Business Loan for a Wedding Venue

• Best Overall Business Loan for Wedding Venues: SBA Loans

  SBA loans are widely considered the best business loans available. That’s because they offer some of the highest capital amounts, longest repayment terms, and lowest interest rates available. The reason SBA loans have such strong terms is because they’re guaranteed by the U.S. Small Business Administration up to 85%. So, in the case of default, the banks that offer these loans have a safety net—which means their risk is lower.

  That also means, however, that these loans are immensely competitive, so they’re only awarded to the most qualified business owners. There’s no minimum credit score technically, but only business owners with strong credit, solid revenue, and several years in business will be good candidates.

  There two main types of SBA loans that wedding venue owners should consider:

  For Working Capital: SBA 7(a) Loans

  The most popular among the SBA loan program are SBA 7(a) loans. These loans are flexible working capital and are granted as either a business line of credit (more on this below) or a term loan—a “traditional” business loan in which you get a lump sum deposited into your business bank account.

  Wedding venues can use these loans for expenses as they need them, whether it’s remodeling a part of the venue, upgrading or purchasing equipment, or expanding your footprint.

  For Fixed Assets: SBA 504/CDC Loans

  Alternatively, SBA 504/CDC loans are also popular, especially for business owners who are looking to purchase buildings, land, or other major fixed assets. That’s the specific purpose of these loans—they’re not flexible working capital like SBA 7(a) loans, but you can get an award of up to $5.5 million and terms of 25 years if you’re a good candidate—practically unheard of with many other similar loans.

  This is a great wedding venue loan especially if you’re looking to build a new location, open a wedding venue (with a strong personal track record in business), or renovate the one you have.

  Note that neither of these loans is quick to fund: There’s a lot of paperwork involved in applying for an SBA loan, and approval may take several months. But if you’re not in any kind of rush, definitely consider an SBA loan for its strong terms.

• Best Wedding Venue Loan Alternative to SBA Loans: Term Loans

  Not every business owner will qualify for an SBA loan. Similarly, you may need to obtain capital faster than an SBA loan will enable you to. That’s why you might want to consider a business term loan.

  These loans are lump-sum loans, which enable you to access capital quickly with a streamlined application process. Here are the two types of term loans you’ll want to consider:

  For Working Capital: Medium-Term Business Term Loans

  Medium-term loans have repayment periods between one to five years. They can be helpful wedding venue business loans for those who need working capital for various expenses, or even small investments.

  For Immediate Needs: Short-Term Business Term Loans

  Another option is short-term business loans, which can help wedding venue owners in a cash pinch, particularly for emergencies. These loans have lower capital amounts and higher interest rates than medium-term loans, but are generally more accessible to a wider range of business owners, including those without perfect credit. You’ll find terms for these loans of three to 18 months. Keep in mind, they will typically have higher interest rates than medium-term loans.

• Best Wedding Venue Loan for Upgrades and New Gear: Equipment Financing

  In the wedding venue business, you’re dealing with a lot of equipment: commercial kitchens, sound systems, even chairs, tables, and dishware. And part of staying competitive is knowing that this gear is working and up to date. If you’re looking for a way to finance fixed assets like these, you might want to look into equipment financing.

  With an equipment loan, you work with a lender and provide them with an equipment quote for what you’d like to finance. Then, if you’re approved, they’ll front you the money for the purchase, and the loan will actually be secured against the equipment you’re purchasing with the loan. That’s important for two reasons: First, that might mean that you don’t have to put additional collateral down; and, second, it means that a wider variety of business owners may qualify for these loans as the collateral is built in.

  This is a great option for business owners who have a specific vision in mind for what they want to finance; obviously, it’s not a working capital loan with flexibility.

• Best Wedding Venue Loan for Cash Flow and Incremental Expenses: Business Line of Credit

  A business line of credit is a very common type of business loan for wedding venues—and for many companies across industries and sectors. It’s a way to quickly access flexible working capital—and you only pay interest on what you use.

  With a business line of credit, you apply with a lender just like you would for another type of business loan. When the lender approves you, you’ll have a credit line against which you can “draw,” not wholly dissimilar to a business credit card. You’ll only pay interest on this portion, not the whole credit line, unless you use it all. And, most business lines of credit are “revolving,” which means that you have access to the full capital amount again once you’ve repaid your outstanding loan.

  These are great for lots of different expenses: payroll for seasonal help, utilities and other overhead, fast-payout investments, and more. You can also get approval for a business line of credit very quickly, which can help entrepreneurs in a pinch. This type of financing may be available to business owners with as little as six months of business history, which is rare.

• Best Wedding Venue Loan for Unpaid Invoices: Invoice Financing

  It’s likely that you don’t invoice your clients as due upon receipt—especially with your larger-ticket events. So, if you’re working with trade credit, you’ll want to know about invoice financing, which can help you access capital that’s tied up in unpaid invoices. This is especially important if you’re having cash flow issues, as getting access to this money can enable you to keep business going.

  With invoice financing, a lender will front you up to 85% of an invoice, and then return the remaining 15%, minus their fees, once your customer pays the outstanding balance. The fee is generally calculated as a base fee plus a percentage for every day the loan is outstanding. Yes, that means that you won’t be getting the full amount of the invoice—but it can be a worthwhile price to pay for businesses that absolutely need to have that money in hand as fast as possible.

  If you don’t have perfect credit or tons of business history, you may be able to still qualify for invoice financing; it’s another situation in which the loan is self-secured through the thing you’re financing—in this case, the invoice itself.