Easy Access to Capital For Your Restaurant Business
We are a direct funding source but – unlike conventional bank loans – we won’t make you jump through hoops or wait for months for financing.
You May Qualify For $4,000 to $2,000,000 to Satisfy Your Needs!
The Unique Needs of Your Restaurant
You May Even Qualify For Additional Capital
Restaurant Business Loans
Comparing restaurant business loans is an important element of the hospitality management. In the fast-paced world of food service, getting the right finance deal can mean the difference between success and failure. A competitive loan will allow you to spread repayments over a reasonable period of time and maximize your cash flow in those quieter months. But getting a poor deal may negatively impact your profitability and leave you struggling to repay the loan. So, what should you look for when deciding between restaurant business loans? What kind of rates and terms can you expect? And how difficult are they to secure? In this article, we answer all of these questions and walk you through everything you need to know about restaurant financing.
1) Restaurant Business Loans – Overview
The restaurant industry has an incredibly high turnover of new businesses. Many start and fail within a year due to the numerous difficulties involved. Business premises in high traffic areas often command extremely high rents. The cost of equipment, stock, and staff can quickly mount up, so it’s vital that you secure the best possible financing option. Restaurant business loans are designed to meet the specific needs of the catering industry and can help to support you on your journey to success.
However, traditional lenders often perceive the catering industry to be a risky investment. Because of the high failure rate, they are hesitant to lend to restaurant owners, especially if it’s for their first venture or a new start-up. If they do offer restaurant business loans, then they often entail meeting strict requirements that can be almost impossible for independent entrepreneurs. Not only will they require a large deposit and spotless credit history, but they will expect you to demonstrate extensive experience in the hospitality industry and want to review your business plan thoroughly. The good news is, there are alternative lenders that take a more practical approach to small business loans. They have less strict eligibility criteria yet still offer competitive repayment terms and interest rates. Alternative lenders often have a simpler and faster application process too, so you can access the funds and put them to good use much more quickly.
2) What Can Restaurant Business Loans Be Used For?
Restaurant business loans can be used for a wide variety of purposes. If you’re looking to open a restaurant then they can be used to pay for business premises, purchase equipment, and furniture, or stock up your fridges with all-important ingredients. They can be used to pay your staff’s first salaries until your generating enough revenue to cover their costs and increase your working capital.
Depending on your location you may find that your restaurant business is seasonal. The weather, tourism, or special events can all affect your footfall and the number of customers coming through your door. Many restaurants have to deal with seasonal demand which can make it difficult to maintain a consistently positive cash flow throughout the year. Sometimes business owners require a lump sum injection of cash ahead of the season. This allows them to prepare in advance and ensure that they can make the most of it. Others use restaurant business loans to invest in marketing campaigns that help to attract customers out of season. Some loan options allow you to use the funds to cover operating costs, pay bills, and meet your immediate needs during the slow season.
There are also those unexpected costs that appear from nowhere. Sometimes restaurant equipment will break, become damaged, or even be stolen, leaving you in need of some quick funding. Restaurant business loans can be used to repair, upgrade, or replace essential equipment so that you’re able to continue operating with minimal downtime. You can also use them to purchase extra equipment to deal with increased demand or expand into additional locations.
Restaurant business loans can also help you take advantage of unexpected opportunities. Perhaps you’ve been offered the first refusal on new premises that are in the perfect location. Or you’ve been given the option to buy out a competitor but need some funding to pay for it. You may have been asked to host a large event but need to invest in supplies for it upfront. Group bookings, weddings, and corporate events all require you to purchase ingredients in high volumes and may involve renting extra equipment and hiring temporary staff. Instead of turning down the opportunity because you don’t have the resources, restaurant business loans can allow you to take full advantage.
3) Different Types of Loans for Restaurants
Restaurant business loans come in several different types, each with their own inherent advantages and disadvantages. Regardless of which type you choose, there are some things you can do to put yourself in the best possible position. Lenders like to see solid credit scores, proven hospitality experience, a decent down payment or deposit, and additional collateral as security. Whether you can meet some or all of these criteria will influence which funding avenues are available to you. In this section, we look at some of the most common loans for restaurant businesses.
Restaurant Business Loans
Restaurant business loans are specifically designed for the hospitality industry. They are usually offered by traditional lending institutions like banks which means they come with associated drawbacks. Complex application processes, strict eligibility criteria, and long waiting times are typically involved with these types of loan. However, if you can meet the requirements and have the time, you’ll often be rewarded with competitive interest rates and flexible repayment terms. These will be determined by the individual institution, loan amount, and duration over which you want to repay it.
Small Business Loans
Although small business loans are not specifically tailored for restaurants they offer a practical alternative to traditional restaurant loans. They can be used to purchase equipment, hire staff, secure leased premises, or drive new customers to visit. A key benefit of small business loans is that they are available from a much wider range of lenders. SBA loans from the Small Business Administration offer highly competitive terms if you’re able to meet their strict requirements. Alternative lenders also offer a wealth of small business loan options without the complex paperwork or hoops to jump through. If you need funding in weeks rather than months, then alternative lenders like us offer a faster and more streamlined process.
Restaurant Equipment Loans
If you’re looking for restaurant business loans to use towards the cost of equipment, then there are specialist funding options out there. Modern catering equipment often carries a hefty price tag yet is a pivotal piece in the restaurant jigsaw. The latest innovations not only improve the quality of your food but can be a point of difference from your competition and allow you to stand out from the crowd. The good news is that many equipment suppliers will have existing relationships with financial institutions and may be able to arrange a leasing program on your behalf. This allows you to pay a fixed fee on a monthly basis to rent the equipment and then make a large payment at the end if you want to own it in full. This can help even out cash flow but means you don’t fully own the equipment in the interim.
Restaurant equipment loans are also available to make purchases with. They usually have a fixed interest rate so that you can plan your payments in advance and are a typically repaid over a three-year period. The funding you get from this type of loan can only be used to pay for the equipment and taxes, so you’ll need to find additional money for things like delivery and installation.
4) Learn More About Our Loans and Working Capital
Restaurant business loans from United Business Funding can give you the capital you need, for today and tomorrow. While credit is a small factor, we approve your short-term business loan based on the current cash flow of your business – not years of financial history. Once funded, payback is made through a small, fixed daily or weekly payment from your business bank account. It’s that easy!
Our tailor-made packages are the ideal solution for established restaurant businesses or relatively new ventures. Unlike other lenders who require two years of trading history, we require your business to have been operating for a minimum of three months. We’ll take care of all aspects of finance, so you can focus on making your business a success. We can also help you with other areas of funding such as arranging lines of credit or equipment financing.
Get access to the working capital you need, even if you are dealing with less-than-perfect credit or have already been denied a bank loan. Whether you’re looking for a one-time cash infusion or have an ongoing need, your business opportunities can become a reality with United Business Funding.
Our hassle-free application process is fast and simple, with unrivaled support the whole way. CLICK HERE to learn more about our restaurant business loans or call us FREE on 888-351-3863 to speak with one of our funding advisors today.