Your own new restaurant may be the culmination of a longstanding professional dream, but that dream could easily be in jeopardy if you fail to get adequate financing for the new place. The restaurant industry is often, unfortunately, notorious for its high expenses, and there are numerous costs associated with opening a brand-new eatery, from kitchen equipment to hiring qualified cooks and waiters to passing safety inspections and more. Don’t let this discourage you from pursuing your dreams, though – there are several ways to get financing for your restaurant.
For Smaller or Unpredictable Expenses, Consider a Business Line of Credit
The type of loan you’ll need depends on how much financing you require. If you only have to finance small items here and there for the restaurant, or if you just want a sort of safety net in case you run into unexpected expenses, your best bet may be a business line of credit instead of a big loan. Though many lines of credit require great credit to qualify, you can usually use them as a revolving door where you can take out what you need periodically and only pay it back as you use the credit.
Check Out the SBA’s Large Roster of Guaranteed Loans
If you can qualify for a loan guaranteed through the Small Business Administration, you’re in an enviable position. Though you’ll have to provide tax records, proof of income, business licenses and other such documents, SBA loans reduce risk and so often come with good terms to help get your restaurant on its feet.
Banks Often Lend Commercial Options to Restaurateurs
If you’ve already got some time in business under your belt and an impeccable track record of references and credit history, you might want to consider going straight to your local major bank and applying for a typical commercial loan. This option usually have more stringent requirements, which is why it may be best suited to those with some experience and background already, but they also tend to offer lower interest rates and more favorable loan terms. If you want additional flexibility, see if there are any local lending institutions willing to work with you.
There are seemingly countless costs involved when you’re first opening up a brand-new restaurant. Sometimes, it can feel difficult to find the financing that you require. Fortunately, there are still several routes out there that can provide enough funds for you to make your restaurant dreams a reality – consider these as a starting point and you’ll be on your way to opening day in the restaurant industry!