Some people, especially millennials, don’t prefer to spend their free hours standing by the stove after work. They would exercise the option to order online food or dine out rather than piling up dishes in their sinks. Students, working mothers, and elderly look for convenience as far as food is concerned. This has resulted in a significant spark in the restaurant business. With more than 1 million restaurants in the United States, the restaurant business is estimated to be $863 billion worth in 2019. Around 40 years ago, the number of restaurants was 155,000 now it is touching a million. Along with this, the number of alternative lenders is also increasing. Although this highlights the importance of the food industry before you start dreaming of running a restaurant, know that a lot goes into planning.

Restaurant business owners have to take care of employees, payroll, taxes, upgrading equipment, and seasonal fluctuations. Money – incoming cash flow is necessary to carry out this task, efficiently. Dreaming of opening a new restaurant? Or finding it hard to juggle this task? A restaurant loan provides enough funding to give an additional boost to your working capital, making you capable enough to put exquisite cuisines on dinners’ tables.

Aforementioned are the five most proven funding and financing options used by the reputable restaurant managers of 2019:

  1. Small Business Administration (SBA) loans

SBA Loan is one of the most common funding options due to its affordable interest rates, government supervision, and flexible offers. Despite having alluring features, this is one of the hardest funding to secure! As the competition is getting tough day by day, business owners with remarkable financial standings can effortlessly get an SBA loan.

With a considerable number of years running a business, a credit score of 700, and no recent history of foreclosure or bankruptcy, you are an ideal candidate for an SBA guaranteed loan. As traditional banks offer these loans, so find the perfect lender that can fund your business. The next step is to assemble a file containing business and personal tax return documents, business plan, credit score report, and other financially significant papers. Apart from this, offering collateral to the lender can improve your chances of approval. With a strategic business plan and advanced credit score, nothing can come in your way!

  1. Equipment Financing

Running a commercial restaurant without high-grade commercial equipment is as possible as winning a marathon without even running. Equipment Financing allows you to lease any type of equipment, be it a fryer or a commercial oven. Leasing comes with affordable repayment terms, allowing you to pay back the loan in 12 months. Lenders are familiar with the hectic routine of the restaurant managers, so they try their best to offer flexible repayment terms with multiple tax benefits.

So, apply for equipment financing and dismiss the worry of paying for the new equipment from your own pocket. The new equipment can act as collateral itself, making it one of its exceptional perks.

  1. Working Capital Loans

With dozens of dinners coming in, you need an ample number of attendants to serve food to every dinner. Often times, it gets challenging to manage payroll. The working capital loan helps to keep the cash flow stream running, with extra funds you would never miss to pay your team on time. Usually, a working capital loan can get you a loan amount from $250,000. It is adequate to cover short-term financial needs.

Apply for the working capital loan to jump-start your restaurant business. And if your business keeps on running successfully, you can utilize these funds to expand your business, and continue putting people into a food coma.

  1. Inventory Financing

What is the core element of the restaurant business? Food! Buying food ingredients is one of the challenges faced by restaurant runners. If you are looking for funds to cover the inventory purchases, then Inventory Financing is the most convenient funding option. The mechanics of Invoice Financing are the same as the Equipment Financing; the inventory purchased through invoice financing act as collateral for a majority of the small business loan lender.

Invoice financing comes in multiple forms, depending on the nature of your financial need. So, before you make a final decision make sure you are clear about your financial needs. Lastly, just so it is clear if you are making payments on time and all the pending debt is clear, the inventory is yours to use!

  1. Lines of Credit

If you need fast funding for your restaurant, a line of credit is your safest bet! Here, the borrowers only pay the amount that he uses. For example, if a lender offers you $15,000, and you spend $10,000 to buy entrée plates, pasta bowls, or a minimalistic painting for your restaurant, then after paying $10,000 with interest, your account is back to $15,000. Lines of Credit help with unexpected expenses and with funds from Lines of Credit, you even take advantage of an opportunity knocking at your door. So, the next time, if someone offers you a staggering deal instead of dismissing it because of lack of funds, you are saying ‘yes.’

With these financing and funding options, your restaurant can stay ahead of its rivals. Lastly, be persistent, make the repayments on time, and improve your credit score along with improving your food hub.

Merchant Advisors offers these above-mentioned restaurant loans, head over to our website, and apply for the ones you see fit. For more information and tips, follow us on Facebook (@Onlinecheck) and Twitter (@Onlinecheck). If you have any query, our financial advisors can get back to you. If you have any question, feel free to call us on our toll-free number at (833) 827-4412, our loyal and keen financial advisor will answer your every question and guide you throughout the way.


Small Business Financing News │ Merchant Advisors | blog
Restaurant Financing: 5 Business Loan Options for Your Eatery
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Merchant Advisors
Merchant Advisors