People who’ve worked in the industry or have owned a restaurant understand the challenges restaurants face. They can be incredibly profitable, but there’s also a reason why so many tend to fail. And the primary cause is the lack of funding.
However, with alternative financial companies popping up, startups and small businesses are able to more easily acquire funding. This is because alternative lenders are willing to take risks where banks do not.
So, regardless of whether you have an established business, or you’re looking into funding a startup, there are plenty of loans available for you.
We’ll Look At:
- Equipment Financing
- Startup Loans
- SBA Loans
- Business Lines Of Credit
- Revenue Based Loans And Advances
The Best Loans To Fund Your Restaurant in 2018
Equipment Financing
Equipment is key when owning and running a restaurant. However, equipment is also a pretty expensive part of it. You’ll need things such as stoves, ovens, storage, and so on. So, when you look at all of what you’ll need, it’s safe to say the numbers will add up.
I’m sure many of you are able to afford equipment on your own, but the benefits of equipment financing go beyond the initial purchases. If you were ever in the need for an upgrade or replacement, equipment financing would be able to cover all of the costs you need at the moment.
And on the plus side, equipment financing is the easiest to qualify for since the equipment as collateral.
Startup Loans
Startup Loans are great for new business owners looking to make their restaurant ideas a reality. You can get Startup Loan funding for up to $350,000. However, you’ll need one guarantor with a credit score between 680 and 800.
So, while most loans have interest rates off the bat, Startup Loans are 0% for up to 21 months.
SBA Loans
So, the kicker with an SBA Loan is that you need an established business to qualify for one. And that pretty much means this one is for any of you restaurant owners with an existing restaurant.
SBA Loans can provide you with a large amount of funding with some of the best interest rates– 6% and 8% for 10 to 25 years. Just know, though, they can take anywhere between 14 – 60 days and you’ll need to provide proof of business during the application process.
Business Lines of Credit
Business Lines of Credit are great in general. They help restaurant owners have that “just in case rainy day fund” while also helping to establish good credit (as long as expenses are paid off on time).
The cool thing about them is that they are pretty dang flexible. Do you need a new oven? A business line of credit can cover that. Need to finance the restaurant during the slower months? That’s right, a business line of credit.
Basically, you’ll only pay interest on the money you’ve used from your total credit amount. And once you do, you’ll be able to draw from the maximum amount once again (Think of it like Recharging a phone battery).
You can get up to $500,000 in funding in a 1 to 2-week process. However, you do need an existing business with revenue.
Revenue Based Loans and Advances
This is great for restaurant owners who are doing really well but haven’t been in business very long. You can get anywhere between $10,000 – $1,000,000 in funding. The benefit of this option is that lenders look at the health of your business and revenue to figure out whether you qualify. So, if you don’t have a long credit history, this one is good for you. And another added bonus is that you can get funded in as fast as 48 hours.
Finance Factory helps you find the best loan options for your restaurant
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!
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