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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Sometimes the most difficult part of running your own business is attaining financing to maintain and sustain steady growth. This is even true when you are looking for restaurant finance. There is a misconception that restaurants are more apt to fail than any other type of work; a 10% success rate is often quoted.

The truth is that at the five-year mark restaurants have 40% success rates, virtually matching to most other types of businesses. Nevertheless, it can be hard to acquire financing, especially from mainstream sources such as the local bank lender.

Restaurant loans can also be acquired from credit card processing vendors as a factoring agreement. These vendors give funding arrangements that range from a few 1,000 dollars all the way to 250,000 dollars if needed. The business owner is basically selling their future Visa/MasterCard receivables at a discount in order to get the funds they need right now.

The business cash advance is repaid through a credit card receivables based contract. A percentage of credit card receipts are paid back based on a “Daily Capture Rate” that is worked out prior to acquiring the cash which means that during a bad business stretch of time the advance can still be paid without facing delinquency fees.

When you operate a restaurant it can be hard to predict when you will need to have additional funds available. Start up capital can be larger than expected, and the first large mistake can be a “make or break” occurrence. Even if the business owner has excellent credit, it can take a long period of time for a bank loan to be approved; in the meantime, business continues to hurt.

Credit Card Factoring options provide a much needed, quick solution for restaurants in need of cash. Neither collateral nor years of documentation are necessary to be considered for restaurant loans when you work with a proven financing company.

Author: Daniel Samoohi
Article Source: EzineArticles.com
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In recent years, businesses needing restaurant loans have been treated as an almost separate, and some may say unequal, category of financing for business loans. Many lenders that understood the special needs of restaurant owners are no longer lending, and other lenders have placed them on a so-called “black list” separate from other small and medium sized businesses because they are considered too risky.

This has left restaurant owners in a real predicament as they fight to regain much of the working capital that they lost in the economic downturn. Even healthy establishments have seen their lines cut due the banking collapse, and this has forced restaurant owners to seek out other sources of financing such as secured equipment loans, commercial mortgages, etc.

However, these types of loans are different and not really catering to the needs of restaurant owners because of the fact that restaurants need a steady infusion of working capital, even when business is slow, to keep deliveries flowing through their back door. Without it, the business will be forced to close, even if traffic is healthy. Because mortgages and secured business loans take a lot of time to process, underwrite, and decision, they have not been able to fill the financing gap that currently exists.

This has left business owners in the unsavory position of having to accept cash advances from their credit card processing company. These high rate, unregulated advances are quick and feature low documentation. However, they often comes with many strings attached such as the requirement to switch processors, buy equipment and pay large upfront fees. Added to this is the fact that the interest rates on these advances can often exceed 50% and may change at any time during the repayment period

Luckily, a better way has entered the market in the form of a new, regulated business loan called credit card receivable financing, that is as quick and easy as a cash advance without all the disturbing requirements such as buying equipment and switching processors. On top of this, the rates are normally 50-80% lower than a merchant cash advance with no upfront fees.

It’s time the restaurant business owners had a real, cost effective option when it comes to obtaining restaurant loans for their establishments. Today’s economy demands creative solutions to the capital intensive needs of business, and this new option that is on the market that fills a gap that major banks and the SBA have left.

Author: Neal Coxworth
Article Source: EzineArticles.com
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There are still viable options for restaurant financing in the market today. Borrowers however should realize and accept that the choices have become more limited, than they where just 6 months ago. For example, most conventional and or conduit type loans for restaurants are now gone.

Instead, borrowers should be focused on portfolio lenders, i.e. banks or lenders that hold the debt on their balance sheet. This is the opposite of what we have seen in the last decade as most restaurant lenders packaged and sold their loans off onto the secondary market and thus rid themselves of the loan in exchange for a split.

Portfolio lenders can be difficult to find though. And they don’t really advertise themselves as such. Borrowers should be prepared to call many banks to find sources that are set up as portfolio lenders and that are willing to consider a special purpose property like a restaurant. Many banks are shying away from this building type. We’re occasional are asked why.

The reason boils down to the difficulty in recollecting the bank’s capital in case of borrower default. When a borrower defaults on a loan, the bank has to go through the foreclosure process, than they have to sell the property on the open market to recoup their capital. Because the building itself was designed as a restaurant it cannot adequately be used for anything other than a restaurant – thus limiting their pool of potential buyers, making it harder to sell.

As far as terms, restaurant loans are almost all now quarterly adjustable. However rates are very strong due to Prime being as low as it is (currently at 4%). We are seeing most restaurant loans in the 6%’s now. Via government sponsored loan programs borrowers can still expect 85% financing on purchases and up to 85% on refinance transactions.

Author: Jeff Rauth
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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Getting funding for a restaurant this year of 2008, is definitely harder on a national level is more difficult then ever before.

Why You Will Find It Difficult To Get A Loan

Unfortunately bank loan officers do not like to do restaurant financing! This year of 2008 is a very tough year, foreclosure rates the highest ever in the history of the United States, a credit crunch due to the mortgage crisis, lenders cherry picking their loans, even denying borrowers with good credit.

So as if the food and hospitality industry was not already difficult for getting restaurant loans, it is much more harder to get loans then ever before due to the recession that is happening currently around major cities in the united states, gas prices going off the roof creating a domino effect in many many industries, consumers not spending as much, going out less due to super high gas prices.

Restaurant failure is the main reason why bankers are Leary of lending money to a new start up restaurants, if the borrower applicant does not have a proven track record in the food and hospitality business.

Success for food service businesses is viewed by bankers as minimal. Their hesitation is due to higher failure rates in the industry for new restaurant owners with no experience opening a restaurant. Unless you have enough collateral to make the loan risk free, banks will usually not approve your loan. This belief is not well founded, since the data is skewed, therefore, it is not accurate and hurts you when you apply for a loan.

Traditional money lending institutions are Leary of lending money to a new restaurant, if a the borrower applicant does not have a proven track record in the food and hospitality business.

What Can You Do To Increase Your Chances Of Success With Your Restaurant

Restaurant Consultants — Set aside some money from your working capital to consult with one. They will help maximize your chances for restaurant success and minimize your chances for restaurant failure; this is the main reason to to speak to a restaurant consultant.

Restaurant Training — Seek out those companies that provide restaurant training

Restaurant Marketing — Become an expert in restaurant marketing, consult with someone who will help you create a great restaurant marketing plan. Implement a moving targets and birthday marketing campaign to generate immediate cash for your restaurant, which you can find out more info with the author of this article.

Restaurant Management Training — Seek a company that will train your restaurant manager.

Restaurant Accountants — Seek out CPA accountants that specialize with restaurant accounting software and restaurant accounting systems.

Restaurant Floor Plan – Warning, pay attention to how you layout the front, back, kitchen area! Could cause to lose profits if you do implement a good efficient cost effective floor plan.

What Are Your Restaurant Funding Options & Sources

Soliciting partners

* Selling stock
* Venture capital
* SBA
* Loans from relatives
Insurance policies cash values
* Credit from food suppliers
* Personal savings
Collateralized loans from your personal assets
* Credit from equipment suppliers

Up till now if you are having problems getting financing for your existing restaurant, your options were limited. There is a product called the business cash advance or merchant cash advance that is a possible solution to you when you find yourself being turned down for restaurant funding.

Copyright@2008

Author: Edwin De Leon
Article Source: EzineArticles.com
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On October 31, haunted houses will occupy every corner, jack-o-lanterns will smile devilishly and monsters, witches, goblins and ghosts will lurk in the darkness of the night. Nevertheless, none of these things will bother you, because you’re dealing with something more frightening than all of the terrors of Halloween. You own a restaurant and you don’t have access to the funds you need to grow and expand your business.

You don’t want your loyal customers to know of the financial difficulties that plague your business, so you wear a mask, like the children who will soon be eagerly walking from house to house, anticipating what types of candies will fall into their bags next. However, unlike these children, you don’t take your mask off at the end of the night. It stays on until you’re finally able to secure the business cash you need, or, your business outgrows itself and begins to fall apart right before your eyes – and at the rate you’ve been going, you’re thinking it might be the latter.

But there is another option, a business financing method that can save your restaurant from the doom you once thought was inevitable – the restaurant loan.

A restaurant loan is a merchant cash advance for restaurant owners. It allows restaurant owners to use their daily credit card sales as a means of securing up to $500,000 in business funds. Providers will review your business’s current monthly credit card sales and based on those numbers, they can advance you cash against your business’s future credit card sales.

You can use these funds to expand your restaurant in order to keep up with a growing clientele and to reach out to additional customers. In fact, there are no restrictions on how restaurant loans can be used, so you can use the cash however you choose.

Restaurant loan applications can be approved in 48 hours and funded in as little as five business days after approval. Get a free online quote today, so by the time Halloween comes around, the only mask you’ll be wearing will be a part of your costume.

Author: Gaston Castro
Article Source: EzineArticles.com
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Starting a restaurant obviously entails lots of work, research and most importantly, dedication. It may be necessary to put a lot of time and effort into a new restaurant, but if done correctly, the results will be well worth it.

You are well aware of these facts, and you are determined to create and run the restaurant that you have dreamed of since you were a child: The one that on the outside, resembles a French cottage, and on the inside boasts of authentic French décor and a menu of tasty French comfort foods, creating an exotic yet homey atmosphere for your patrons.

Still, another vital component of starting a restaurant is of course, money. So where are you going to go to find the money that you need to build this restaurant of your dreams? Why not get a restaurant loan?

What is a Restaurant Loan?

A restaurant loan is an unsecured loan that can be used for startup restaurants as well as restaurants that are already in existence. The restaurant loan is given as an advance against the restaurant’s future credit card sales. This means, new restaurant owners can get the cash they need to finance startup costs now, and pay later, without having to make scheduled payments every month. Instead of the traditional fixed monthly payments, restaurant loans are repaid little by little as customers make credit card purchases.

You don’t need any collateral to secure the loan. Your restaurant’s future credit card sales are collateral enough for restaurant loan providers. Your payments go with the flow of your business and therefore a borrower does not feel such a sting when it’s time for loan repayment.

Finding startup cash can be a difficult process. The availability of restaurant loans can make this process much easier, not to mention faster and often more convenient.

Author: Gaston Castro
Article Source: EzineArticles.com
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Many people have heard the startling myth that nine out of 10 restaurants fail within their first year of opening. Hearing this can make anyone who is contemplating going into the restaurant industry think twice.

But according to H.G. Parsa, associate professor in Ohio State University’s Hospitality Management program, as quoted in a Business Week article, this is not true.

After researching, he found that realistically, 3 out of 5 restaurants close or change ownership within their first year of business.

According to the article, Parsa also identified “…lack of sufficient startup capital as one of the major elements that contribute to a restaurant’s failure,” leading him to believe that many banks won’t lend to restaurants because they may believe those mythical statistics. The article states, “Typically, the ones that do [lend] require would-be restaurateurs to pay sky-high interest rates or put up significant collateral…”

But even if banks are wary of lending to restaurant owners, especially new ones, for the reasons mentioned above, there is another option; restaurant loans.

Restaurant loans can be used for startup restaurants, or for restaurants that have been in existence for any length of time. The loans are unsecured, so there is no collateral required, nor are there fixed monthly payments. Restaurant loan payments are made via the restaurants credit card sales. Once a restaurant owner receives a restaurant loan, whenever customers use their debit or credit cards to pay for their food or drinks, a small percentage from the sale goes to repay the restaurant loan. This allows the loan repayments to go with the flow of business.

Another benefit of the restaurant loan is borrowers receive the opportunity to renew their restaurant loan once 60 percent of their previous balance has been paid. Therefore a new restaurant can get a loan and the money funded into the account of his/her choice within the first week of the restaurant’s opening. But it doesn’t stop there. These renewal opportunities allow restaurant owners to have access to an ongoing source of business financing, as they can renew their loans as many times as they like.

Increase your chances of restaurant success by getting a restaurant loan, and having enough money to finance everything that a successful restaurant needs.

Author: Gaston Castro
Article Source: EzineArticles.com
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The restaurant industry is booming. With 945,000 U.S. locations and 13.1 million employees, 2008 restaurant sales totaled $558 billion dollars. That means, on a typical day, restaurant industry sales are about $1.5 billion.

In order to produce these numbers, restaurant owners need cash, cash that many attempt to acquire through bank loans. But when the bank is not an option, many would-be borrowers feel discouraged and often like they’ve hit a road block. However, restaurant loans provide an alternate route.

A restaurant loan is a form of a merchant cash advance. Like merchant cash advances, the loan is repaid via the credit card purchases of customers. Also, like merchant cash advances, they can be renewed, offering restaurant owners a type of “revolving loan.” Unlike most cash advances, that require a merchant to have owned his/her business for at least four months to be eligible for a loan, a borrower can receive a restaurant loan within the first week of the restaurant’s opening. Now in addition to being able to use the loan to expand your restaurant, for a boost in working capital, or for a special project, new restaurant owners can use these loans for startups as well.

Restaurant owners understand that creating a venue that appeals to consumers is vital, as obviously, these types of sales would not be possible if it weren’t for the consumer. People go out to eat when they don’t have the time to cook, or simply don’t want to cook. They go to restaurants to celebrate milestones, birthdays, holidays and accomplishments and to spend time with friends and/or family.

According to statistics provided by the National Restaurant Association, 70 percent of adults said their favorite restaurant foods provide flavor and taste sensations which cannot be easily duplicated in their home kitchens.

Restaurant owners have the challenge of keeping up with the times, providing healthier options and sometimes environmentally friendly sites, as “62 percent of adults said they are likely to make a restaurant choice based on how environmentally friendly a restaurant is,” states the National Restaurant Association.

Restaurant loans can make it possible for restaurant owners to provide these meals that customers can not duplicate, to create environmentally friendly spaces, and to finance all of the endeavors that it takes to make and keep customers. The loans can be attained with no collateral and offer a repayment process that is ideal for restaurant owners. Choose a restaurant loan to help bring out the best in your restaurant.

Author: Gaston Castro
Article Source: EzineArticles.com
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