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How To Obtain A Restaurant Business Loan

If you are actively seeking financing, there are several specific steps you can take to help support your case when you speak with a lender.

Business Plan

A lender is assuming significant risk when they loan capital to a new business owner.  Therefore, they will always want to see a business plan that is detailed and clear concerning how the company intends to make a consistent profit.  Your Restaurant Business Plan should include every detail including square feet of the building, number of tables, number of expected diners per day, expected revenue, operational costs, rent, etc.

Financials

A lender is going to want to see financials for up to three years when you are applying for restaurant business loans.  At times, it can be easier to secure financing if you are purchasing a pre-existing restaurant.  This gives the lender a very good idea of potential revenue and expenses.  A lender may also want to see your personal financial information for the last several years in order to determine whether you are an effective financial manager.

Finding Investors

Once you have written a detailed business plan and have your financials in order, then you are ready to apply for a loan.  The restaurant industry is typically an industry with very low margins, high overhead and high rents; therefore, many banks are hesitant to loan money to restaurants.  Therefore, you may need to look into alternatives.

ARF Financial has unveiled a new 30 Day, No Interest and No Payment offer to save you money! Pay off your current cash advance and pocket six full weeks of cash flow by acting now.  Or, borrow funds for that project with high ROI and complete it before your payments even begin! *

Small Business Administration

This is the first place to go.  The SBA exists to help small business owners secure financing for new companies.  There are various government guarantee loans.  Simply visit www.sba.gov to find more information.  If the SBA cannot help you, they may be able to point you to other alternative loan agencies.

Small Business Lender

A simple Google search will yield hundreds of websites for small business lenders.  Now, make sure you exercise extreme caution when contacting a company that you are unfamiliar with.  If you are not business savvy, it may be a good idea to have a lawyer help conduct due diligence on any firms you are considering borrowing money from a lender and seeking to secure restaurant business loans.

Angel Investors

Angel investors are private investors who seek to loan money to new companies in exchange for a stake in the company.  Not all angels are created equal.  Again, search the internet for Angel groups in your area.  Oftentimes, it is possible to set up a meeting where you can pitch your business idea to a group of Angels.

The Deal

Once you find a lender, the next step is to make sure you are getting a fair deal.  Remember, there are many dishonest people in the world of loan servicing, so make sure you fully understand the arrangement and all terms and conditions before you sign any papers.  Again, it is a good idea to have a lawyer review any contracts before signing.

Here are a few key points to consider:

·         Make sure the interest rate is competitive

·         No hidden fees or large commissions

·         Monthly payments that are realistic

·         No early repayment penalties

These tips will help ensure that you find the best deal available.

*Offer available to new merchants with 1+ years in business and on loans with terms of 52 weeks or greater. ARF Financial is a Licensed California Lender # 6037958 and a California Limited Liability Company. Loan approval, loan amount and interest rate are based upon applicant’s credit worthiness and A.R.F’s standard underwriting guidelines.

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