5 Ways That Your Bar or Restaurant Can Utilize a Short-Term Working Capital Advance

by Kieran Daly
May 3, 2023
5 Ways That Your Bar or Restaurant Can Utilize a Short-Term Working Capital Advance

When it comes to running your restaurant or bar it’s important to ensure that you always have the capital on hand to keep operations running smoothly while not disrupting your guest's experience, but this can be a challenge especially when large upfront costs eat away at your working capital. What is the best way to be able to meet the needs and expectations of your customers without sacrificing your own capital immediately?

A short-term working capital advance can be a great tool for restaurant and bar owners to meet and overcome the day-to-day challenges that come with running a successful business. Read our five ways that your restaurant or bar can use short-term working capital to effectively improve your customers' experience.

What Is A Short-Term Working Capital Advance?

A working capital advance is a type of funding provided to a business to help it manage its day-to-day operational expenses. It is essentially a short-term loan that can cover expenses such as inventory purchases, payroll, rent, and other overhead costs.

The amount of the working capital advance is typically based on the business's cash flow and revenue, as well as its creditworthiness. Sometimes, a lender may require collateral to secure the loan, such as business assets or accounts receivable.

Working capital advances are often used by businesses that have seasonal fluctuations in revenue or need to make large investments in inventory or equipment. They can be an effective way for businesses to maintain their cash flow and keep their operations running smoothly during financial stress.

How Can A Short-Term Working Capital Advance Help A Bar or Restaurant?

1. Core Purchasing Inventory

Core purchasing inventory is crucial to supporting your restaurant or bar throughout its operations. From fresh produce for menu favorites to bulk purchases of spirits for your establishment’s best-selling cocktails, these resources are a necessity for your business and they can cost you a lot of capital upfront, and in the long run when continually purchasing them.

Keeping a well-managed inventory can help your business avoid stockouts, reduce lead times and minimize costs associated with stockholding. But, what do you do when a gap in cash flow from a slower period prevents you from purchasing necessary inventory? This is where a working capital advance can help! You can utilize a working capital advance or loan to help your restaurant or bar cover these short-term costs and ensure that you always have adequate inventory to meet your customer's demands, 

2. Upgrading equipment

It’s an inevitability that at some point in time, you will have to replace the equipment in your restaurant or bar. Things break, machines get less efficient and there is always a new kitchen gadget that is making the rounds to serve your customers more efficiently. 

When it comes to upgrading items such as refrigerators, ovens, or cooking ranges, the high costs can put business owners in a really tough place. Luckily, you don’t need to use all of your hard-earned capital all at once when upgrading your equipment. The vendor you go through may offer a Buy Now, Pay Later program to help you finance this cost over set terms, and if not then you can take advantage of of a short-term working capital advance to front the funds needed for the investment. 

3. Marketing and advertising

When running your restaurant or bar, bringing new customers through your doors is always going to be at the forefront of your mind. While your business may be in an established location with decent footfall traffic, you will still have to sensibly market and advertise your business in order to attract more customers and build up a loyal customer base. 

Marketing can often be an expensive endeavor, especially when only beginning to do so or competing in a crowded market.  However, you can front these initial costs with a working capital advance. By using a working capital advance you can retain your current capital while launching campaigns or events to drive foot traffic and increase sales while using the profits from these efforts to pay back the loan. 

4. Staffing

Adequate staffing is crucial to running a successful bar or restaurant. It’s always of key importance to ensure that you have the right amount of staff ready to accommodate your loyal customers at peak hours, during events, or at the busiest times of the year. Included in the cost of staffing is also ensuring that your staff is fully trained before these busier periods so that they can deliver stellar service to your guests, resulting in increased sales. 

Restaurants and bars can utilize a working capital advance to bring on new staff members and train them on the precipice of busier periods to ensure that your new hires are ready to properly take care of your customers. This investment in your staff could easily pay back the working capital loan as well as provide a nice profit for you to reinvest back into your business. 

5. Repairs and renovations

We’ve already covered that sometimes things break, but potential repairs are not limited to just equipment. Wear and tear happens over time and buildings need maintenance. You may even want to renovate your establishment at some point by giving it a fresh coat of paint or even new decor and furniture to bring more customers in the door or even to keep your regulars happy. 

Restaurants and bar owners can use a short-term working capital advance to front the initial costs of such projects and ensure that their facilities are always safe and attractive for their guests. However, it is paramount that you ensure that you are not using short-term funding for long-term projects, as the goal should be to use the return on investment to pay off the advance before the terms expire.

Short-Term Working Capital Advance Options






$25K - $2M

4 - 16 months

Minimum of 1 year in business, a minimum $50K monthly revenue, a business bank account, and a personal credit score of 625


$5K - $250K 

3 - 24 months

Minimum of 1 year in business, a minimum of $100k in annual revenue, business bank account, personal FICO Score of 625


$5K - $2M

6, 12, or 24 months

Minimum of 2 years in business, a minimum of $50K in annual revenue, $12K in annual credit and debit card sales, no credit score minimum


$2.5K - $500K

1 - 3 years

Minimum of 2 years in business, may have to provide collateral and a “strong” credit score. 

Fora Financial

Up to $1.4M

Varies based on your credit card transaction volume.

Minimum of 6 months in business, a minimum of $60K in credit card sales or $144K minimum among all transactions, and a minimum credit score of 500.

Backd’s Working Capital: The Financial Tool For Your Restaurant or Bar

When it comes to finding a short-term working capital advance to help your restaurant or bar grow, Backd is here to help. 

Backd’s Working Capital Advance is one of the best on the market with competitive rates and terms that actually allow your business to grow. Backd offers working capital advances of $25K up to $2M with terms of up to 16 months. 

If you’re considering taking out a working capital advance then apply with Backd today. Our application only takes 3 minutes to complete with funding arriving in your account in just 24 hours. Don’t wait to get the funding that your business needs to grow, take the first step and apply with Backd today.

What would you do with the right amount of capital?

Working Capital Advance

Easy payment structures offer amounts with fast turnaround, Simple and easy process to access working capital.

  • Flexible - no collateral required
  • $10K - $2M
  • Terms up to 16 months
  • Automatic daily or weekly, or semi-monthly payments

Business Line of Credit

Get instant access to revolving credit with unlimited terms, and the best rates for your business.

  • Draw funds anytime
  • $10K - $750K
  • Unlimited terms, incredible rates
  • Soft credit pull that doesn't affect your credit score