Whether you are a second-generation restaurateur or just in the start-up phase of building a restaurant empire, getting restaurant business loans can be a challenge. Unfortunately, banks are notorious for turning restaurants down for the working capital they need, and there are predators out there that will take advantage of an unsuspecting restaurant owner who finds himself in a financial bind. The Latin Times describes the challenges of getting a loan as a small business in general – it can be even more difficult for women and minorities.Maybe it’s because many restaurant owners love what they do so much that they forget this is an actual business. You may have the culinary skills that others envy, but are finding it difficult to manage your finances. Cash flow is a common problem in the restaurant business because it’s based on customers, and we all know how finicky customers can be!
Secrets of getting a small business loan for your thriving restaurant
Now you find yourself in the place of trying to figure out the secrets of small business loans for restaurants. The good news is that you don’t have to search high and low for the answers – we’ve got them right here for you.
Secret #1. You don’t need squeaky clean credit to get a small business loan for your restaurant.
Very often, restaurant owners think that they will never be able to qualify for a small business loan, simply because they have had credit issues. The truth is that there are programs for restaurants that can provide access to low cost small business loans. These programs can also help to rebuild credit following a slow period. Don’t be afraid to talk with the caring experts at United Capital Source for more information.
Secret #2. There are small business loans for every type of restaurant need.
While most lenders will want to have an idea of how you intend to use the funds from a small business loan, the secret is that there are products that require no reason at all. One can easily obtain a small business loan for a restaurant by working with a financial firm that has relationships with multiple lenders. So whether you need to buy some new equipment, hire new employees, or decide to expand – you have choices.
Secret #3. Banks don’t always offer the best small business loan products to restaurants.
In the past, restaurants walked into their local bank and received a small business loan, just like that. Now, however, banks view restaurants as risky due to the recent recession that closed the doors of many. The secret is that banks are not always the best option nor do they offer the lowest interest rates in small business loans.
Secret #4. The more you educate yourself about small business loans, the better you will fare.
This is not so much as a deep secret as it is common sense. Do your homework before you apply for any small business loans for your restaurant. Get educated about what’s available and what types of loan programs are right for restaurant needs.
Secret #5 – Watch out what gets published on social media about your restaurant.
The Chicago Tribune examines how social media can help small businesses establish their brand and obtain a loan, but there is still a big problem with social media. People use their business pages as personal venting spaces instead of marketing and networking tools. Don’t be fooled thinking that financial companies won’t ever find that rant about a customer you posted last month. Clean up your social media page to ensure you have the best chance of obtaining a small business loan for your restaurant.
Secret #6. Whom you choose to partner with matters a lot.
It’s a basic principle of being in the restaurant business to have a few partners, whether active or silent. The choice of who you connect yourself to legally can have an impact on your ability to get a small business loan. Make sure your investment partners have sound financial practices and decent credit scores.
Secret #7. Paying small business loan payments late can hurt your chances of getting more money.
Once you have tapped into a small business loan, you may think you can put it on the backburner for a while. But even one missed payment can ruin your relationship with the lender. If you will be late on a small business loan payment, let the lender know in advance. The secret is that they often have flexible ways of helping you meet your obligations.
Secret #8. There are many special programs just for women and minority restaurant owners.
Before you accept any small business loan for your restaurant, be sure to check with your blender about special programs for women in business and minority-owned businesses. There are some generous loan products geared specifically for these markets and you could be saving much in terms of application fees, interest rates, and repayment amounts.
Secret #9. You have a built in cash machine right at your fingertips.
Does your restaurant accept credit and debit card payments for services, using a point of sale system? Then you have a virtual cash machine sitting in front of you! Merchant cash advances can be a solution for obtaining small business money ahead of time to pay for business needs, and repayment happens over time as each future transaction occurs. This can be a very easy way to manage cash flow without paying too much in interest.
Be sure to keep checking back to our blog here at United Capital Source as we continue to provide your restaurant with the most up-to-date financial information to help you run a better business. We pride ourselves as being able to serve restaurant owners like you as you maintain a high quality of food and beverage sales for your valued customers.