The small business lending market has grown notably diverse, with a far more options than simply traditional bank loans available to fund your restaurant business. Here are 5 best restaurant financing options for ambitious and seasoned restaurant businesses alike:
- Small Business Administration Loans (SBA)
Small Business Administration (SBA) loans are the most complicated loans to acquire, but unbelievably, full-size restaurants have advantaged more from SBA loans than any other type of business throughout the last decade, followed closely by way of limited-service restaurants and fast food.
This was no small feat for these restaurants; however– the SBA financing require personal guarantees and collateral that allows you to close the deal. This regularly is going to the extreme, which include as many personal assets as the borrower has available. For loans backed by the SBA, small business borrowers are actually putting their personal financial futures at risk on the way to close these loans.
- Working Capital Loans
Working capital loans are the most basic types of business loans available and can be acquired from different lenders. Working capital loans are a super catchall for cash to cover everything from getting your new restaurant off the ground, to covering payroll in the course of slow times, to buying new equipment. Working capital loans are best for restaurant business owners who need small amounts of fast cash for a short time frame. The maximum amount acquired from this loan is $250,000.
- Restaurant Equipment Leasing
In case you need particular equipment as opposed to working capital, restaurant equipment leasing could be the best, low-risk funding option for you. One of the great features of restaurant equipment loans is that the equipment you are buying itself serve as collateral for the loan rather than anything you personally possess. Standard loan terms are three years, which is enough time to pay off the loan easily.
Relying on your credit, you can acquire loans for anywhere from 80-100% of the value of equipment; however the rest might usually require an advance payment. It is also to remember that the equipment financing might not cover any extra fees such as delivery or installation charges.
- Restaurant Inventory Financing
In the same way that restaurant equipment loans are for getting the equipment you need to run a restaurant (such as a commercial stove, dining furniture, or an oven, and so forth.) Inventory financing is a type of short-term loan or line of credit used for getting the edibles you will be serving your clients. The inventory you are financing can be used as collateral; however, for the reason that this is going to be perishable food, that likely will not help in getting a loan for a restaurant.
- Alternative Loans
Currently there is a flourishing market of alternative lenders in which restaurant loans can be secured online. Frequently, these alternative loans can be secured without any personal collateral or risk, and can be used to fund everything from new equipment, to hiring more workers or expanding marketing efforts.
No matter whether you need startup cash to get your restaurant off the ground or have a well-established restaurant that you need to expand, restaurant loans are here to help you.