Start a Restaurant

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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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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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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For many years restaurants have gotten a bad rap when it comes to perceived risk.  Business experts and people in general are prone to citing “The High Failure Rate” of restaurants as a reason not to invest in or start restaurants.  Most of us are so use to hearing such talk we simply accept it as truth.  If we were to ask those who claim that restaurants have a higher failure rate than other small businesses to provide a references for their claim, they couldn’t.  There aren’t any credible research studies to support this myth.

I recently published an article outlining how anyone can dramatically improve their odds of success at starting a restaurant business.   The same day that the article was published a reader left a great comment, which not surprisingly mentioned the high failure rate of restaurants.    For the benefit of aspiring restaurateurs, restaurant investors, and the restaurant industry, it’s time to set the record straight.

There is no meaningful difference in the failure rate of restaurant start-ups and small business start-ups in general.  According to the Small Business Administration about 44 percent of small businesses are still operating after four years.  Similarly, according to a 2007 study conducted at Ohio State University, 41 percent of restaurants were still operating three years after launch.

As someone who has owned and operated a restaurant in a major city, the enjoyment and social aspects of being a restaurant owner fall just below rock star, local celebrity, and city mayor.  A popular restaurant allows the owner to be at the center of community events.  More importantly, if restaurant owners avoids the trap of trying to “Do-it-All” themselves, they can also enjoy a well balanced lifestyle.

The classic nightmare restaurant ownership scenario of long frantic days is the same for any entrepreneur,  who does not graduates from working in his business to working on his business.  Moreover, if restaurants were failing at the staggering 90% rate that some quote, it is unlikely that the restaurant industry would have been growing at double digit rates prior to the current recession.  

Author: Shed Wallace
Article Source: EzineArticles.com
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