Start a Restaurant

While there’s no denying that debt can fuel the startup and growth of a restaurant, there is a point when more is definitely not better.

Cash flow is the key. Can your business afford to make the payments each month from the cash that is left over after all other bills are paid? Bankers call this “debt coverage” — a fancy term to describe the cash coming in to the amount needed to “cover” the loan payments.

Although different banks will require different “debt coverage”, most bankers agree — If loan repayments consume more than half of your cash flow, you may be in for trouble: One bad month could mean a missed payment, and those kinds of problems tend to multiply. Don’t let a banker sell you a bigger loan than you can handle… and likewise, don’t plan for a restaurant that requires more debt than you can afford.

Jimmy Katopovis, owner of Steele Creek Caf in Charlotte, NC, says that he figures his fast food restaurant will spin off profits of about 10% of sales each month. When he decided to borrow the money he needed for expansion, he knew that his monthly loan payment could not exceed 10% of his expected sales. That set a pretty tight cap on how much he could afford to borrow, he says.

Leslie Kohn, of Nextaurant, Inc. in San Francisco warns that each restaurant, and each owner, will have a different appetite for loans. “There is no one-size-fits-all solution,” she says. The best advice is to get good advice. Make use of a CPA or financial consultant to determine how much is too much.

If a CPA is not in your budget, a simple XL spreadsheet can give you a glimpse into the future. Download a simple “loan amortization” table (available at numerous websites) and calculate your likely loan payments. Its safe to figure a 20 year term for a building loan, but for other debt 5 years may be the longest available term.

Doing this exercise on paper not only helps with planning the size and scope of your restaurant, it may help you craft a more financially sound business plan… before it’s too late.

David Worrell is a successful serial entrepreneur and an advisor to businesses of all sizes. He now sits on the board of directors of both private and public companies, and offers free business advice at http://www.dworrell.com. At his website, business owners will find a variety of free tips and tools for improving the cash flow and profitability of their companies. The resources are free, and so is membership. Join today and receive a free report, “The Colors of Money” — 27 pages chock full of ideas for funding your growing business. http://www.dworrell.com

Author: David Worrell
Article Source: EzineArticles.com
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Denver, CO, United States (AHN) – Winter storms that swept through Arizona on Wednesday are headed to Colorado.

Arizona motorists encountered icy roads and snow that closed some roads on Wednesdays and restricted travel on others. Visibility was hampered by blowing snow.

Temperatures on Friday and Saturday morning are forecast to be the lowest since January 2007 in Arizona with predictions calling for a cold 29 degrees on Friday morning.

In the meantime, Colorado on Thursday began bracing for the approaching storm. It is expected that the storm will bring the first significant amount of snow to the Windsor and Front Range areas of northern Colorado.

However, forecasters also said that there was enough uncertainty over the storm’s track that no one could know for sure whether it would dump a lot of snow on Colorado or blow by without producing anything much.

Erring on the side of caution, Frontier Airlines moved quickly to give passengers a way to avoid potential problems.

The airline issued a press release on Wednesday informing passengers that the approaching storm could alter flight schedules. Frontier announced it would give passengers planning travel to, from or through airports in Denver, Aspen, Colorado Springs, Durango and Steamboat/Hayden on Dec. 30 and 31 a chance to alter their tickets without any charge.

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Los Angeles, CA, United States (AHN) – California is being battered by heavy wind, rain and snow resulting in thousands left without power.

The storms rolled in Friday and the entire state has been affected. The Santa Monica Mountains in the south have had more than 12 inches of rain while Mammouth Mountain ski resort received 13 feet of snow.

Central Los Angeles has been deluged with 5 inches of rain since Friday morning, accounting for more than a third of the region’s average annual amount. Rivers of mud are flowing down Los Angeles’ famed Hollywood Hills.

Nearly 21,000 people in the southern portion of the state are without power, while in the farming region in the central part of the state 2,000 people were told to evacuate.

Residents travelling on roadways in the region are crawling at a snail’s pace as cars inch along bumper to bumper. In some areas people are wading through knee-high waters.

With the inclement weather officials are warning of the dangers of flash flooding. The rain could also send the rising rivers and streams in the area surging out of their banks.

The U.S. National Weather Service warned that a new storm would “bring heavy rain” through Wednesday afternoon.

As bad as it is on the western side of North America, Europe is being battered even harder. Much of Europe is under a blanket of snow that is expected to continue to fall for the next several days.

Freezing weather has crippled the infrastructure of the region’s travel. Thousands of travelers are stranded across the continent as flights and train service have been cancelled for days.

Britain’s Heathrow Airport, the largest air hub in Europe, has been operating under limited service for days. The resulting logistical disaster has sparked criticism from the thousands of stranded travelers and even the government.

Even 72 hours after the first major snowfall, the airport reportedly still has a lack of snow clearing machines and personnel that are seemingly the root of the airport’s major problems.

British Airways is likely to make a “significant number of cancellations,” according to the airline, further adding to the frustration of travelers during what is one of the busiest times of the year.

Iced-over roadways have also caused more than their share of problems. Some roads are so impassable drivers opted to just abandon their vehicles in heavy snow and walk.

In what is also the busiest shopping time of the year, the weather is proving to be contentious for retailers. They fear the poor weather will affect their sales.

Earlier this month insurer RSA said the snow could cost the British economy up to $2 billion dollars a day.

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5 simple steps to keep your sweet tooth in balance.

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The government recently doled out $1 billion for the CARS (Car Allowance Rebate System) program that allows consumers to turn in their “clunkers,” cars that get 18 or less MPG (and meet other requirements), and a receive $3,500 or $4,500 discount on a new vehicle. Last week, the government decided to infuse an additional $2 billion into the program, which has already “…helped [automakers'] companies, suppliers, scrap yards, steel producers and other small businesses,” (Reuters).

Nevertheless, as the owner of a small business that doesn’t sell cars, you may be looking for your own cash infusion. Though there may not be a government-created program equivalent to cash for clunkers, designed to help other retail and/or service-oriented business owners, there is still a way for merchants to get funds for their businesses – merchant loans.

Merchant loans lenders offer various programs designed for small business owners located in both the United States and Canada. Starter merchant cash advance programs allow merchants who have been declined in the past to be advanced a small amount and a larger amount once the initial advance is repaid. The standard merchant loan program offers up to $500,000 to qualified small business owners, and the premium advance program provides the best rates and flexible loan terms for merchants who meet special qualifications.

Some merchant loan lenders even offer new restaurant loan programs, in which restaurant owners do not need to have a six-month track record in order to receive funds. Merchants who qualify for this program can get up to $500,000 for their restaurants within the first week of the restaurants’ openings.

Basic merchant loan requirements include:

· Merchant must have owned business for at least six months
· Business must process at least $3,500 in monthly credit card sales
· Business must have at least one year remaining on lease
· Merchant may not have unresolved bankruptcies

Get a free online quote today and find out how much money a merchant lender can infuse into your small business.

Author: Gaston Castro
Article Source: EzineArticles.com
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What are restaurant loans? This is a query being circulated amongst restaurant owners and fast food chain franchisers for the past year. To answer this briefly, restaurant loans are business loans that are primarily availed of by restaurant owners. These are loans that have been personalized in order to address to each and every need of such restaurant owners. The amount that you can get will depend upon the type of restaurant or business that you have together with the time frame that the said business has been established, a summary of the annual sales of your restaurant, the total amount that you need and your credit score. You will also be asked if you have already filed for bankruptcy and then your loan can be processed.

Your business may belong to a classification like a bar, lodging, nightclub, restaurant or other classifications. This is crucial information in order for your need for restaurant loans to be processed by the bank or lending firm. Logical dictates that bigger restaurants, bars and nightclubs will necessarily get bigger amount of loans than smaller scaled ones. If you are in deep need of financial assistance due to the effects of the worldwide recession and the global financial crisis then this is the perfect kind of loan for you to avail of! The larger your chain of restaurants are then the larger the amount that you can borrow, it is as easy as that!

The total duration or time frame that the business has been established is also a primary requirement before availing of these restaurant loans. The longer that your business or restaurant has been subsisting then necessarily the larger the amount of loan that you can borrow. This is in correlation with your annual sales that can come in gross or net sales. If your business has been doing well then you can get higher amounts. If your business is on a struggle against the global recession then the amount that can be granted to your will be lessened. An expert with regard to handling loans called a loans expert will be the one to process your request, trying to grant you the total amount that you need in the process.

Your credit score is also one of the primary factors in determining the validity of your restaurant loans application. If you have bad credit score then necessarily you will not be prioritized. If you currently have well to moderate credit scores then you will be put in the priority list. Having well to moderate scores will ensure approval of your loan. All you need to do is to wait for 24 hours for your loan application to be approved and processed by the loans expert. It is a major plus if you have not yet filed for bankruptcy since you will have good scores. Just make sure that you fill up the application form with the correct facts since the loans expert will conduct a credit investigation on your credit standing. It is as easy as that!

Author: Rodney Moss
Article Source: EzineArticles.com
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