Start a Restaurant

Sometimes the most tense part of running your own business is acquiring cash to maintain and sustain ongoing growth. This is even more true when you are looking for business loans. There is a misconception that restaurants are more likely to fail than any other business; a ten percent success rate is often quoted.

The actuality is that at the 5-year mark restaurants have 40% success rates, almost identical to most other types of businesses. Nevertheless, it can be difficult to acquire funds, especially from normal places such as the local bank.

Restaurant loans can also be obtained from credit card processing providers as a factoring contract. These vendors offer funding options that range from a few 1,000 dollars all the way to a quarter million dollars if needed. The business owner is basically selling their future Visa/MasterCard sales at a discount in order to get the money that are necessary immediately.

The business cash advance is repaid with a credit card receivables derived agreement. A percentage of credit card receipts are paid back based on a “Daily Capture Rate” that is agreed upon before acquiring the capital that means that during a bad business period the advance can still be paid without facing delinquency fees.

When you are running a restaurant it can be tough to anticipate when you will need to have a certain amount of cash available. Start up expenses can be more than anticipated, and the first major mistake can be a “make or break” event. Even if the business owner has impeccable credit, it can take weeks for a bank loan to be funded; in the time being, business continues to be bad.

Credit Card Factoring agreements give a much needed, speedy solution for restaurants in need of working capital. Neither collateral nor years of financial statement are necessary to qualify for business loans when you work with a reliable financing agent.

Author: Daniel Samoohi
Article Source: EzineArticles.com
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There are many sources in which restaurant owners could turn to in search of restaurant funds. All of these funding methods have both advantages and drawbacks. Therefore, it is up to restaurant owners to evaluate their individual businesses, and determine which funding options best suit them.

Traditional Bank Loan

Explanation

A traditional bank loan is a business loan that a restaurant owner can receive through a bank. The money must be repaid over a certain period of time. Many banks offer business loans to small business owners who meet specific requirements, some of these loans are even backed by the Small Business Administration (SBA).

Benefits

o SBA loans available
o Low interest rates

Pitfalls

o Strict, often hard-to-meet requirements
o Long waiting/processing periods

Restaurant Loan (Merchant Cash Advance)

Explanation

Merchant cash advance providers advance restaurant owners up to $500,000. They utilize credit card factoring, allowing the restaurant owner to repay the advance through a small percentage of his/her business’s future credit card sales.

Benefits

o Up to $500,000 in business funds
o Minimal requirements
o Unsecured
o Excellent credit not required
o Flexible repayment procedure
o Renewable
o 7-10 day funding

Pitfalls

o More expensive than other methods
o Not suitable for restaurant owners who do not process credit card sales

Personal (Family, Friends, Savings, etc.)

Explanation

Money accumulated in savings accounts as well as money borrowed from or donated by friends and family can be used to fund a restaurant.

Benefits

o If taking money from your own savings, it does not have to be paid back
o No stringent requirements

Pitfalls

o May leave you with little to no money for emergencies
o Can potentially ruin and/or strain relationships

If after evaluating your restaurant, you realize that a merchant cash advance is your best option, you can get a free online quote and apply online.

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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If there’s one thing restaurant owners can learn from Wolfgang Puck, it’s never to give up. Their journeys to success may not be as extreme as the famous chef/entrepreneur, who began as a cooking apprentice in Austria at the age of 14, then moved to France four years later and “…wrote letter after letter to all the two- and three-star restaurants,” as he told Inc.com, until he was finally hired. For some, it may be as simple as letting go of age-old ideas and traditions and applying for a merchant cash advance when business loans don’t come through. 

The circumstances and stories will differ as greatly as the types of restaurants these small business owners own, but the decision to work hard and adapt to change in order to succeed is what’s important.

If a lack of business funding is the problem, a business cash advance can be the solution. Many merchants that don’t qualify for bank loans do qualify for restaurant cash advances. Virtually, any restaurant owner who has owned his/her business for at least six months, processes a minimum of $3,500 in monthly credit card sales, has no unresolved bankruptcies and has at least one year remaining on his/her restaurant’s lease will qualify for a restaurant cash advance of up to $500,000.
 
Merchants who choose to take advantage of a merchant cash advance for their restaurants have the freedom to use the funds for equipment upgrades, purchases of inventory, expansion, advertising, or anything else they can think of that can potentially improve their businesses. Then, they can renew their funds every three to four months.
 
Choosing a restaurant advance may be the decision that takes your business from good to great. It may be the decision that keeps you from having to close your doors. Get a free online quote today and find out how much you can receive for your restaurant.

Author: Gaston Castro
Article Source: EzineArticles.com
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You may be aware of this, but there a number of firms that can actively assist you as you looking for business loan. These firms are commonly known as loan brokerages. They work in a very similar capacity to that of a mortgage brokerage firm but with a specific focus on business loans. However, before engaging a business loan brokerage you should be aware of a few things. Like with any industry, there are a number of unscrupulous firms and individuals that seek to take advantage of people that are not privy to how the industry works. In regards to loan brokerages, you should be wary of any firm that requires substantial upfront fees before assisting you with obtaining a business loan. However, some of the fees presented by a loan brokerage can be reasonable. For instance, fees for business plan development and credit reports should be reasonable while several thousand dollar retainers for simply taking on a project are not. When working with a business loan brokerage you should always perform your own due diligence. Does this firm have references? Are they are member of the Better Business Bureau? What is their success rate?

Once you find a firm that you want to work with when looking for business loan then it is time to begin negotiating the fees. Typically, most business loan brokerages charge a fee ranging from 2% to 10% of the successfully raised capital. Again, this is subject to negotiation. If you have a substantial amount of collateral, an excellent credit score, and a solid business plan then the fees should be lower as your chances of obtaining a business loan are much higher than people that do not have the same qualities.

One of the pros of working with a business loan brokerage is that you can quickly receive a number of loan offers from a number of banks and lenders within days of submitting your formal application. Additionally, the business loan brokerage can assist you immensely with developing the appropriate application and business plan so that your business loan request can be processed faster than if you did it on your own.

One of the primary negatives to working with a loan brokerage is that they can charge substantial fees for their services. However, these fees can be justified if the loan brokerage is legitimate and able to secure a business loan on your behalf.

Bad credit is one of the main reasons for bank loan denial. A credit score lower than 580 will most likely ruin your chances for a business loan. Multiple credit checks also lessens your chances for approval. And of course, a recent file for bankruptcy will ensure denial on your request.

Fortunately, there is no reason for despair if you belong to this group of people. There are now available alternatives for getting a small business loan, regardless of your bad credit. It is important, however, that you understand your circumstances before jumping into these alternative means for a business loan.

You can opt for an unsecured personal loan in such cases. But before you do, consider these factors first. One, how much do you need as a business loan? Factor in the numbers and come to a close estimate of how much you really need. Two, how much can pay each month. You have to note that personal business loans often have higher interest rates per month and if you’re not careful, you might become more in debt than you actually were, before the business loan. And three, will you be making minimum payments? Avoid making minimum payments because it actually costs more in the long run.

A business cash advance is also one way of securing the money you need. A small business loan through cash advance is  relatively an easy process to go through as compared to borrowing money from a bank. Most small business, even if they do have good credit, have often little asset and property. This is what makes business cash advances a good alternative for small entrepreneurs in need of immediate money. The only important thing your business should have is access to credit card services (i.e. you accept credit cards for transactions). You just need to have your business’ credit scores established. The best way to do this is to separate your personal credit from your business credit. It is recommended that you control most, if not all, of your business credit needs from only one of two credit card service providers so you have better chances at getting approved quickly. Lastly, your business will need to have gained $2,500 to $4,000 as minimum credit card sales per month.

Most cash advance providers base the amount of business loans by average monthly credit card sales, and of course, your actual need for capital. A business cash advance as a business loan is recommendable because the processing time for approval of your business loan can be as short as 3 days. Since newly opened small  businesses encounter a lot of time constraints with suppliers and clients, easy and immediate access to additional funding is always a plus. Furthermore, cash advance as a small business loan now comes easy with the help of the internet. You can apply for a business cash advance online and have it approved the next day. The business loan will be directly deposited into your account once it is approved.

Use your small business loan to purchase new equipment, marketing, pay debt or taxes, or pay the payroll. Banks and big lending companies are now not the only way of getting a small business loan for your immediate business needs. Fast, online cash advance is now the new means of making your business grow and compete in whatever market you are thriving on.

Restaurant financing was once very difficult to obtain but today there are many options for financing and restaurant loans are offered by various financial institutes as well as traditional banks.

There are many factors that will come into play when looking to obtain financing for your new restaurant. For example, the size of your restaurant, your experience, how much funding you are putting up, and how much funding you need.

Money makes the world go round and it definitely makes your restaurant go round. Whether you are opening your very first restaurant, moving your existing restaurant to a bigger location, remodeling, or adding new a new bar – it matters not, all of it entails restaurant financing, and restaurant loans are much different than regular business loans.

Restaurant loans can be challenging to obtain and frustrating for you. This just isn’t an industry that the banks like, so you need to be ready for rejection to occur. The good news is that there are loans available if you just persevere. Here are some tips to help you get that financing in place.

Explore

Explore various financing options. What works for someone else might not be right for you. So don’t be afraid to spend some time online to find the right loans for you.

Commercial Restaurant Loans

You may have trouble finding conventional restaurant loans, especially if this is a new venture without a proven track record, but it’s still worth a shot. The key is to be able to prove to the bank that you are really low risk. The banks job is to have assets to cover a percentage of the amount of money they lend, so take a little time to understand how this works.

SBA Loans

SBA loans are something that many aren’t familiar with. This is an alternative to the traditional restaurant loans offered by your bank. Through the private sector loans are granted through various lenders and the SBA will guarantee up to 85% of the principal. There are actually more than 500 lenders in Canada that offer SBA loans. If you are turned down on traditional restaurant loans, you may be a candidate for an SBA loan.

Investors

There are many individuals and companies that are interested in investing in new ventures including restaurants. Unlike restaurant loans investors own a portion of the business. You determine the agreement between you and the investor.

Seller Financing

If you are purchasing an existing restaurant many times the seller is willing to finance. Don’t be afraid to ask.

There you have it – restaurant loans are readily available, perhaps just not in the traditional form that we are so used to, but certainly in many other forms.

Author: Gordon Petten
Article Source: EzineArticles.com
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