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TOPIC: Theatre Financing

Theatre Financing 28 Feb 2011 16:14 #35434

  • jacker5
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Looking into getting financing for a twin in a small town. The banks are reluctant to lend unless you put a lot down. 50% + cash!
Who would be the best bet for a profit theatre to get assistance for a loan?
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Re: Theatre Financing 28 Feb 2011 23:08 #35439

  • Keweler
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If you are rural enough try to find a bank that works with the USDA. I got a loan from my local bank guaranteed by the USDA for 90%.

Good luck,
Jay
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Re: Theatre Financing 01 Mar 2011 13:32 #35446

  • lionheart
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It seems like many banks are too skittish to loan money for a theater these days. A USDA Rural Development loan may be available, as Keweler said, but I don't think that will be easy to come by either. SBA loans don't seem easy to get nowadays, for sure.

Probably if a bank told you that you need to put 50% down, it is just a conventional loan with them not having any government guarantees. A minimum of 30% down (and often 50%) is pretty much the norm for conventional loans for any business, not just for theaters, as I understand it.

Probably the most likely sources, if the above mentioned sources don't work out, are going to be personal loans. That's right, you need a friend or relative to loan you the money. And for most, that might be difficult or impossible to come by. You may not want to put them at that great a financial risk if it doesn't go well.

If you can't get any kind of loan, the only alternatives left are owner financing of some sort, or bootstrapping it yourself. In case you don't know what bootstrapping is, I will tell you. It means pay for everything yourself. If you have any money in the bank or any major assets to sell, such as a home, land, etc, you may be able to come up with enough money to do something. It just may not be on the grand scale that some hope for.

Some people might have the assets to bootstrap it, but they do not want to take the risk. But that is exactly what you are asking a bank to do. Others would be willing to sell their home or other assets, but the economy is such that selling is difficult. Patience will be necessary.

If my advice seems old hat, then I am sorry. But that is just the way I see it.

I was offering a lease-to-own option on my theater, if somebody would buy the equipment up front, but now others who have a stake in this are not so sure about leasing-to-own or owner-financing because it will put us at much greater risk than selling outright. So that is why owner-financed deals might be hard to find as well. Sellers do not want to wait for 20 years to get their money out of the deal.

Right now, I am just trying to sell for asset value ($275K). Maybe somebody can bootstrap that if they are interested in eastern Oklahoma.
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Re: Theatre Financing 03 Mar 2011 18:51 #35477

  • dsschoenborn
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I got SBA loan at the end of the year. Bank said SBA had a lot of stimulus money. It was a ton of paper work and took a long time but the bank said that was about the only way to get the money.
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Re: Theatre Financing 04 Mar 2011 01:36 #35481

  • BusyBee
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We got a USDA loan, as well. Our bank financed 50%, and put together the deal with the USDA for the other 50%. It was surprisingly easy. The USDA portion didn't require a down payment but we put 20% down on the portion our local bank financed. I will say that we went to every bank in our area, and they were all reluctant. The last bank we went to was our small, local bank and they were very excited about the project and got us financed quickly. So, shopping around makes a world of difference.
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Re: Theatre Financing 02 Apr 2011 18:39 #35628

  • genedo
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