Tips for Restaurant Financing
According to the US Government small business association, “while poor management is cited most frequently as the reason businesses fail, inadequate or ill-timed financing is a close second.” Therefore, “Whether you’re starting a business or expanding one, sufficient ready capital is essential.”
First you will need to determine how much money you will need
You need to first determining how much money you will need, in addition to securing enough money to get you through to solvency. To secure the adequate amount of money you have several options. There is traditional funding, small business funding, venture capital loans, and alternative restaurant funding. If you have begun the process of securing a loan for your restaurant project, then you know it can be an arduous task. You may even be to the point where you need to consider alternative restaurant funding.
Alternative restaurant financing is an option for those who have trouble qualifying.
Alternative restaurant financing is more expedient and less rigid than traditional restaurant financing. Alternative restaurant financing is a great option for people who would not otherwise qualify for commercial bank loans, SBA loans, and private investor loans. These traditional loans require the applicant to jump through numerous hoops to secure a loan. These proverbial hoops include showing business plans, providing evidence of past successful performance, proving that your restaurant is in what the lender would consider a “perfect site location”, or raising enough money to provide a large equity investment to show you are committed to the project. Unlike alternative restaurant financing, traditional restaurant financing will also scrutinize your personal finances and past credit history.
There are several forms of Alternative Restaurant financing.
Alternative Restaurant Financing might include seller financing, finding a partner, or securing a personal or home-equity loan. On the other hand, you can acquire alternative restaurant financing through companies that focus specifically in providing these types of loans. The unparalleled flexibility of such a loan may allow you to set and control your interest rates, obtain a loan for which you would not otherwise qualify, and structure a payment schedule that works best for you. Companies that specialize in Alternative Restaurant financing have experience in working with restaurateurs and are therefore familiar with the unique needs and challenges of a restaurant owner. In addition, these alternative restaurant financing companies are especially aware of what it takes to start a successful restaurant project. Therefore, they will be uniquely qualified to design a program that will meet particular needs.
Consider all of your options
To get funding for your restaurant, consider all of your options and start your search with traditional lending options whenever possible. Since alternative funding is primarily for higher risk clients, they are likely to carry higher interest rates and be more costly in the end.
