Bar LBO

[djbuzz]

Hey all, I'm looking at purchasing a bar in Tx and was curious if anyone had any knowledge/experience with a bar LBO.

Before I head off looking for more capital I was looking for some heads-up on rates others have experienced recently for cash-backed loans.

Thanks for the help,
Don

[jld73]

Email me at jld73@hotmail.com, would be interested in knowing how you plan to LBO the club. I have studied LBO's quite a bit but haven't really seen it done with a club.

[jbrett]

Ok time to make myself look stupid but whats a LBO?

[jld73]

An LBO is a leveraged buyout of a business. It is where you load the firm up on debt (say60-70% of capital structure is debt) so you reduce your equity stake. If this is done correctly it can REALLY increase the returns you realize. BUT....it is risky and I can't see a bank letting you do it with something like a nightclub. Usually this is done in a mature industry where cash flow are very stable. Here is a link you can browse around if you want to learn more:

http://giddy.org/dbs/sf.htm