Being prepared with a loan for your restaurant can make or break your success. However, you’re likely already familiar with the challenges surrounding the restaurant business. And you may even have heard that roughly 60% of all new restaurants fail within the first year. The food industry is tough, but it’s also a great opportunity to make some big money.
Since you’re here, it’s safe to say you’re at least considering a loan for your restaurant. Which makes sense. Running a restaurant requires a great bit of money. And let’s be honest, you may not have all the cash readily available. Even so, you’re likely a little skeptical about whether you should take out a loan. You’ve probably seen or heard dozens of anecdotes surrounding loans being both helpful and harmful.
Again, it all makes sense. There’s a reason you’ll see all of these different opinions out there. Because it’s true. While loans are crazy helpful for the food industry, not all reasons are good reasons when it comes to taking out loans. But that doesn’t mean there aren’t plenty of great reasons to get a one.
7 Best Reasons To Get A Restaurant Loan
So, whether you’re a current restaurant owner or looking to become one, here are our 10 best reasons to get a restaurant loan.
1. New Real Estate, Expansion, Or Both
While new real estate and expansion could be different things, they’re similar enough that we’ve listed them together. This is because you could be expanding or moving to a new location. And in either of those scenarios, you’re still dealing with new real estate.
However, expansion doesn’t have to mean another location. It could also be because you want to add an outdoor patio or increase the amount of space inside. Whatever the reason, it takes quite a bit of money to expand and make up for the restaurant’s downtime.
2. Renovations And Keeping Up With New Technology
Whether your decorations and furniture are dated, or you just want to make the existing space more exciting, you’ll need a way to fund it. The atmosphere and how your space looks absolutely impacts how customers feel. And even whether they want to come back.
Renovations don’t always have to be about the aesthetics. Updating hardware and software in your restaurant could easily increase workflow and productivity. And it’s a bonus that new stuff will typically be a bit more pleasing to the eyes, anyway.
3. Unexpected Repairs
Successful restaurants run in a fast-paced environment. So, if you want to have a profitable restaurant, you’ll have to be prepared for whatever may happen. Any of your appliances or equipment could break and bring your whole restaurant to a fast stop. You don’t want that.
It may seem costly to repair broken equipment. But it’ll cost you much more in sales if your restaurant doesn’t run smoothly. Having financial help in place to cover the sudden repairs could save you in the long run.
4. Equipment and Inventory
It’s safe to say you can’t run a restaurant without the equipment to safely store, prepare, and cook the food. You need commercial ovens, stoves, refrigerators, freezers, and– well, you get the point. And whether you get older appliances or the latest and greatest stuff, it’ll be pretty expensive regardless.
And beyond even the equipment, it’ll all be pretty useless unless you make sure you have the finances to keep inventory. This includes all your food, seasonings, and so on.
5. Everyday Operations And Employees/Hours
To meet the demands of your customers and employees, many restaurants need to take out loans to finance it all– especially early on. Your restaurant may be crazy busy in the summer. But if things slow down in the winter, it could be pretty challenging financially. You want to make sure you can keep up with payroll and still compensate your employees for their hours.
Word of mouth is great, but if you’re new or not drawing in much business, you’ll need to market your restaurant. The quality of your food may be great. Heck, even your atmosphere could be amazing. But you shouldn’t ever be too confident about the people who stop by spreading the word.
Whether it’s ads, commercials, or promotions, it’ll all cost money. However, it’s necessary for a successful restaurant.
7. Builds Your Credit
If you have very little credit, loans can be a great way of building it up. As long as you pay everything consistently and on-time, your score will skyrocket. And with a better score, you’ll get better rates on just about everything you buy. Beyond that, it’ll simply make any future financial assistance easier to get.
To Close It All Out
Unless you have a substantial amount of money laying around, a restaurant loan is an absolute must. There are tons of things needed to run a restaurant, and they’re not cheap. And while opening a restaurant can be a risky endeavor, with the right amount of financial assistance and planning, you can make a huge amount of money. Finance Factory helps you find the best loan options for your restaurant
Finance Factory Helps Find The Best Loans For New And Current Restaurant Owners
Interested in finding funding for your business? Finance Factory would love to help! If you’re looking to fund your business within the next 30 to 90 days for $25,000 to $500,00 and have a credit score of 660 or better, let’s chat! Get pre-qualified right now with our quick-step pre-qualification form! And don’t worry, this will not result in a hard credit inquiry of sensitive information. We just want to learn more about you and your business. Click below to get started!