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Thinking of applying for restaurant business loans? There are several types of small business loans available for restaurants. You can use the money for every imaginable purpose. But you need to get your restaurant ready for small business loans.

First, let’s look at what you need to do to apply for a bank loan. If you have what it takes to succeed with a bank, your restaurant is well-prepared. If you’re looking for an SBA-backed loan, you will need:

  • Good character
  • Experience in the restaurant business (I know you have that!)
  • Good business credit – and, usually, good personal credit
  • Detailed financial statements
  • Cash flow projections for at least one year
  • Detailed business plan
  • Collateral to ensure repayment
  • A personal guarantee

You will be asked how much working capital you want, how you plan to use it, and how you expect to repay it. You should be clear on these three details every time you consider borrowing. The purpose and amount will point you toward the most appropriate business loan.


I understand you may not want to apply for small business loans right now. But I’m guessing you might have reacted to the list above by repeatedly saying to yourself, “I don’t have that.” If so, you are not alone. Many restaurant owners are so busy just maintaining their businesses they don’t have time to think about financial “niceties.” But you have to, if you want to get ready for small business loans.

I think you’ll relate to Mark Scheipe. He says, “Let’s face it, for most small businesses, the loan process ranks right up there with root canals, bee stings and paper cuts.” But I have a response: not when you work with United Capital Source!

If you aren’t ready for small business loans, don’t stress. You can improve your position, without sacrificing control of daily operations. In fact, Mark Scheipe goes on to note, “By taking appropriate steps to prepare in advance, small business owners can dramatically increase their chances of securing loan approval.”


The SBA says, “Even before you start gathering and organizing the information required by lenders to consider your application, you should educate yourself regarding business loans so you can understand and discuss intelligently with the lending officers when the time comes.” This is easy when you partner with us here at United Capital Source. Your dedicated account rep will explain all your options. And answer all your questions. Best of all, he or she will take the time to understand your business inside and out. Small business loans should serve you well, not just your lender.

Your business credit is a reflection of your past history. Probably your personal credit history as well as your restaurant’s. Many restaurant owners started by self-funding. If you’re still using personal credit to fund your business, stop. It’s time for your restaurant to build its own credit profile. This will help you get small business loans. And it will protect your personal credit.

Look for a business line of credit and/or a business credit card. But don’t go into debt unnecessarily. Make payments on time – and make sure suppliers report your good history to the credit bureaus. Check your business credit report, and fix any mistakes.

Does your restaurant have bad credit? My advice is to do everything you can to clean it up. This isn’t something you can do overnight. But I guarantee you’ll like the benefits that come with a good business credit score. The sooner you start, the sooner you’ll be eligible for more types of small business loans. And you’ll be eligible for lower interest rates.

Good credit brings other benefits, too. It’s not only banks that look at your credit score. Insurance companies, payroll companies, your credit card processor and suppliers all do. They may give you better rates if they’re confident you will repay on time. The money you save this way gives you more working capital to operate and grow your restaurant. You have more options.

The Small Business Administration has resources to help you learn more about financial management and creating a business plan. You’ll find advisors in the SCORE program and at Small Business Development Centers and Women’s Business Centers. These resources are free.


If your restaurant is newer, you may not have enough assets to serve as collateral for a traditional business loan. For that matter, most restaurant loans aren’t large enough to interest banks anyway. But there are excellent alternatives to get the amount you do need. And it’s a lot easier to qualify.

For example, your restaurant may be eligible for a short-term business loan that is unsecured. Some restaurant loans aren’t really loans at all. At least not in the traditional sense. Accounts receivable financing, or factoring, allows you to sell your unpaid customer invoices to a third party at a discount. You get the money up front, and the lender (called a factor) collects from your customers. But unless your restaurant does a lot of corporate account catering, for example, you probably don’t have receivables to sell.

That said, your restaurant does do a lot of credit card business. So a restaurant cash advance is a great option for you to obtain working capital. It’s similar to factoring. A third party advances you money, then takes a percentage of future credit card transactions until they are repaid. The more credit card business you do, the more you can borrow.

One reason merchant cash advance is so popular with restaurant owners is that repayment rides with the inevitable ups and downs of your income. You’re never on the hook for a big payment when you have a slow day. At UCS, we make it fast and easy for restaurants to secure this type of financing. And we match you with the best merchant advance partner for your business.

Now is the time to get your restaurant ready for small business loans. Then, when you want to expand, you’ll be prepared to succeed.

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your small business.

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