State Laws May Boost, Bust Bar Businesses

Fifteen states prohibit the sale of liquor on Sundays but six of them may be rethinking their prohibition on booze. Alabama, Connecticut, Georgia, Indiana, Minnesota and Texas may dump their bans on Sunday drinking. One of the prime motivators for Sunday liquor sales is the tax revenue such sales can generate. According to the Distilled Spirits Council, such a move would increase state liquor revenues by 5-8 percent, and would have a similar effect on bar businesses.

Liquor sales tend to weather recessions well, and all states control the sale, alcohol content – and in some cases the price – of liquor. Along with the sales, the states impose taxes on liquor, and its performance during a recession makes it an attractive target for lawmakers looking to line the state coffers with a little extra silver.

According to the Distilled Spirits Council of the United States, liquor revenues rose almost 3 percent in 2008. While that may seem like a bright spot in an otherwise slow economy, annual average growth has been measured at about 6 percent per year since 2000. Nearly half of all states are currently considering proposals to raise liquor taxes.

The regulation of liquor sales is of prime importance to entrepreneurs in the bar business. Other laws not directly related to liquor - like bans on smoking in public – can also make a noticeable impact on a business’ bottom line. North Carolina is currently considering a statewide ban on smoking in restaurants and bars. Bar owners there are concerned that a ban would reduce their already-suffering revenues. In addition to banning smoking in bars, the new law – if approved – would prevent smokers from lighting up in public work spaces, bowling alleys and restaurants.

Restaurants and bars are already feeling the effects of the recession. Regular patrons are cutting back on their expenses, and dining seems to be a favorite cutback target. The instability of the economy can take its toll on a restaurant or bar. Periodic dips in cash flow can create problems.

That’s where a merchant cash advance can help. A merchant cash advance isn’t a loan; it’s an advance on your future sales. If you own a business that accepts Visa or MasterCard, and has credit sales of at least $2,500 per month, a merchant cash advance can put money in your hands quickly and without the hassle of a bank loan. Ask about our special restaurant financing program.

Ninety five percent of merchants who apply for a merchant cash advance are approved and the money can be in your hands in seven business days or less. Even businesses with less-than-perfect credit can receive cash advances.

When your business is on the line, don’t wait. When you need cash, contact Rapid Capital Funding and ask about a merchant cash advance for your business.

Photo Credit: Rob Owen-Wahl

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