Wedding venues and other event spaces are expensive to create and maintain—but we don’t have to tell you that. As a venue owner, you can benefit from business loans for wedding venues, which can give you access to the capital you need to accomplish your company goals. Whether you need to pay extra hands for a big event, invest in new equipment, or even renovate from top to bottom, a wedding venue business loan can help.
We’ll go through the best options for different business loans, and help you navigate which type of wedding venue financing is best for your needs. Then, we’ll review some of the documentation you should prepare so you can get cash in hand as fast as possible.
There’s no one best business loan for wedding venues. In actuality, the best loan is the one that suits your needs. That can mean many different things to different wedding venue owners: Some need cash quickly, others need high capital amounts, some need to purchase fixed assets, and more.
The key to finding the best business loan for your wedding venue is figuring out what you need in financing, exactly. Do you need capital ASAP? Do you need it to be flexible? Do you have strong credit? The answers to all of these questions will point you in the right direction to your best loan option—and help you rule out the loans that aren’t the best fit.
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.
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.
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.
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.
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.
Now that you’ve had a chance to review the best business loans for wedding venues, give a thought back to those questions from the beginning. Knowing the characteristics of these loans—which fund fast, which address what kind of capital needs, etc.—should help you feel good about being able to identify the best loan for your wedding venue business.
Once you’ve targeted the loan type that you’d like to apply for, and the amount of capital you need (and can repay), you’ll need to gather specific documentation that lenders will need to see for your application. Note that different lenders will ask for different types of documents to apply for a business loan, so what you’ll exactly need will be dependent on the type of business loan that you apply for and the lender with whom you work.
Still, you can do some advance work getting some papers ready—it’s almost certain you’ll need to show some, if not all, of these in order to get your application and approval moving along:
A note on SBA loans: As we mentioned, documents to apply for SBA loans are voluminous, so you’ll need to gather a lot on your end, and likely work with a representative to identify the rest of the forms you’ll need. You can definitely get a jump on applying for an SBA loan by pulling the above as well as a business plan, business licenses, and the personal tax returns of any other owners in your business.
You know better than anyone that wedding venues are capital-intensive businesses, so looking for a business loan for your wedding venue can really help you keep your company both solvent and flourishing. If you’re still not sure which of the business financing options available are right for your needs, keep on researching—and don’t forget to evaluate the core questions of when you need money, what you need the money for, and how much money you need. This should lead you to the right loan—and, hopefully, exactly the capital you’re looking for.
Sally Lauckner is the editor-in-chief of the Fundera Ledger and the editorial director at Fundera.
Sally has over a decade of experience in print and online journalism. Previously she was the senior editor at SmartAsset—a Y Combinator-backed fintech startup that provides personal finance advice. There she edited articles and data reports on topics including taxes, mortgages, banking, credit cards, investing, insurance, and retirement planning. She has also held various editorial roles at AOL.com, Huffington Post, and Glamour magazine. Her work has also appeared in Marie Claire, Teen Vogue, and Cosmopolitan magazines.