Many bowling centers are older and need updating to maximize their revenue and cash flow.  In addition, centers in growing markets may be looking to expand inside (larger bar/restaurant, new bowling equipment, laser tag, or arcade games) and/or outside (mini-golf or go-karts).  However, new equipment and building renovations are expensive and can be difficult to fund from cash flow alone. 
Bowling is unique in that much of the equipment has a very long life.  Therefore, using real estate financing with its lower rates and longer amortization can be an ideal way to raise the funds for new equipment as well as remodeling or expanding the building.   However, real estate loans can be expensive due to loan fees, appraisals, among other costs.  Nevertheless, they may help a center generate the highest net cash flow after debt service.
Although these expenditures may improve the center’s cash flow and can easily be justified to the center owner, it may not be easy to convince a lender that a loan to finance these items is justified.  A lender will need a comprehensive understanding of both the individual center, it’s owner, and the bowling industry.  Historic cash flow will need to be analyzed as will projections of future cash flow.  Supporting assumptions to the projections will be needed and the assumptions will need to be justified with third party data.  Ken has worked with dozens of center owners in similar situations.  His involvement with the BPAA Benchmark Studies gives him a unique view of the bowling industry and his accounting and analytical experience helps to convert the owner’s plans to a written proposal that a lender is more likely to understand – and approve.

Below are some before and after photos of a center in Bay City, Texas.

 Before Counter
After Counter
   After Inside