To put it simply, it depends! Every business’s situation is unique and some of the requirements may be difficult to accomplish. Some of these factors include..your credit score, the quality of your business plan, your previous experience working in restaurants, and the type of collateral you have.
Here’s more information on what you should know about how to get a business loan for a restaurant.
What Types Of Business Loans Can I Get For My Restaurant?
There are four main types of business loans available for new and existing restaurants and their business needs.
Small Business Loans can provide you with same-day funding. These loans typically grant a minimum of $10,000 and a maximum of $5,000,000. Both offer flexible repayment plans, with as much as a ten year repayment term.
You may be wondering, how hard is it to get a small business loan for a new restaurant? If you’re trying to open a restaurant, chances are you have done the majority of the work needed to prove you are a good candidate for a Small Business Loan.
A solid business plan is key when demonstrating that you are a good candidate for a Small Business Loan. When making a business plan for your restaurant in hopes of learning what loan opportunities are available to you, keep in mind that outlining a clear and long-term strategy can affect your maximum loan size and your repayment terms.
Startup Funding are intended for new businesses, which means companies that have been in business for six months or less. First starting your business is when you need the most cash upfront but have the least access to typical business loans.
A Business Line of Credit is a revolving loan where you are able to take out the funds that you need when you need it and repay it afterward. Rather than one lump sum at one time, you are able to access these funds when needed. A Business Line of Credit is useful for restaurant setups because they can smooth over day-today cash flow fluctuations.
Equipment Financing is a useful but specifical loan option. Unlike your other three business loan options, which can typically be applied to nearly anything you may need for your business. Equipment Financing is used exclusively for equipment needed for your restaurant, such as ovens and specialized cooking or baking equipment.
Benefits Of Financing Restaurant Equipment
Restaurant equipment can be very expensive. When buying equipment for your restaurant you want something high quality that will last your business a long time, although this equipment comes with a high upfront cost. Obtaining a Small Business Loan for your restaurant makes it much easier to purchase the equipment needed to give your business its best chance at success.
Sometimes the equipment needed for your restaurant is a little out of the ordinary. This may make you question if you are still able to receive a business loan for the unusual equipment needed, in most cases the answer is yes! Before approving the funds, they may need to check the equipment just to be sure it qualifies for a small business loan. Oftentimes, this equipment usually does get financed, so try not to worry. With this type of loan, the equipment you purchase will become collateral. If you don't make your payments on time, the equipment will be seized.
One benefit of financing your equipment is the ability to use your funds for other things your business may need, such as hiring staff, purchasing other supplies, or advertising your business.
How Can I Apply?
You can get started with our quick 15 Second Application. We will connect you to your very own personal Business Loan Advisor, who will help you assess all of your options and find the best option for your business. Your Business Loan Advisor can also help you address topics like opening a restaurant with a Small Business Loan or even finding an investor opportunity.
About the Author, Madison Taylor
Madison Taylor is the Brand Ambassador at ROK Financial. She is responsible for raising brand awareness and business relationships with business owners across the country. Madison loves that she plays a small role in getting Business Back To Business Through Simple Business Financing and looks forward to hearing what you think about the blogs she creates! Madison has been working in the financial space for six years, and loves it! When she is not at work, you will find her at home learning a new recipe to test out on her family or going on new adventures with her friends.