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TOPIC: Need Financing Suggestions

Need Financing Suggestions 01 Jul 2008 16:48 #29596

  • revrobor
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Hey Guys:

I have a completed business plan for an 80 seat "family friendly" mini-cinema. I have picked a building in a local shopping center and it has been approved by the city. Now I need to find the money. I need only $110,000. to convert the former store into a theatre thanks to some teriffic bids from dealers. My problem is I don't have the credit to go to a bank. My score is about 580. I'm looking for a private party preferably someone with the same vision as I. Any suggestions?

Bob Allen
The Old Showman
Bob Allen
The Old Showman
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Re: Need Financing Suggestions 04 Jul 2008 22:14 #29597

  • jgleason
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Bob, you should be able to get a SBA backed "504" loan. Check with your local banks. I'd try that before resorting to private financing.

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Re: Need Financing Suggestions 08 Jul 2008 12:37 #29598

  • Barry Floyd
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Ditto on the SBA 504 loan program. I used that same program to finance and build our theatre. Some folks have some weird notion that SBA loans are for people who can't get regular loans. Not so.
The 504 loan program provides funds to be used for real estate purchaes, construction, equipment, etc.

In the 504 loan program, you end up working to two separate entities: your local bank and a CDC (Community Development Company).
You as the business owner provide 10%-15% of the cash equity, the CDC provides 40% at a fixed rate, and your local bank provides 50% at whatever rates you can negotiate. The 50% portion of the loan provided by the local bank is "backed" by the SBA. In other words, if you default on the loan, the SBA pays your local banker for the amount of default. It almost eliminates the risk for your local banker.

It's worked well for us.

Barry Floyd
Floyd Entertainment Group
Lebanon, Tennessee

Stardust Drive-In Theatre
Watertown, Tennessee
Barry Floyd
Floyd Entertainment Group
Lebanon, Tennessee

Stardust Drive-In Theatre
Watertown, Tennessee
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Re:Need Financing Suggestions 08 Sep 2008 10:13 #29908

  • nfein8
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Hi Bob,
I'm interested in developing a similar mini-cinema and wondered how you got started. Not having any experience in the industry, I am not sure how to begin. Any advice you could offer me on how you got your business plan together would be much appreciated. Also, if you have had luck in financing since your last post, I'd be interested in knowing that too. The big question, ofcourse, is can a mini-theater be profitable?

Thanks again and good luck to you,
Natalie
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Re:Need Financing Suggestions 16 Sep 2008 09:15 #29961

  • rdetzler
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I have a 504 and I can tell you that it comes with some steep costs. Think hard before you go this route. By the time you pay the fees associated with these loans, it can really add up. Plus, it is typically short term financing in the sense it is rewritten every 5 years, so your rates can adjust dramatically. Finally, there are LARGE pre-payment penalties on these notes that you cannot get out of, so you will have this debt for a while even if your business is booming along nicely. I would only do it again as a last resort.

Roger Detzler
President
IOKA Entertainment Inc
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Re:Need Financing Suggestions 21 Sep 2008 12:31 #29988

  • Mill
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If you are in a rural area, the Dept of Agriculture might have some rural development funds available. They can guarantee up to 80% of your loan, and can go longer terms than the SBA programs.

A private avenue, you could check with Pacific Concessions. pacificconcessions.com
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Re:Need Financing Suggestions 04 Oct 2008 08:51 #30047

  • jacker5
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Has anyone delt with Pacific Concessions. pacificconcessions.com and could recoment them for renovations. They seem to be CA based.


Also has any one Delt with Ocean Pacific Capitol. was wondering if there any good an legit?

www.oceanpacificcapital.com/movie-theater-financing.php
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