Your restaurant is more than just a nice place to eat. It’s a community hub where friends and family gather to share life’s greatest experiences over savory meals. It’s a place for making memories and celebrating milestones. For this reason, and many more, you may be seeking a small business loan that will enable your business to expend into new neighborhoods, where more joy is to be spread. The only problem is, you may have been denied a small business loan by your current bank for reasons unknown. What aren’t they telling you that could help you get the business capital you need?According to the National Restaurant Association’s 2016 forecast, restaurants are booming in America, to the tune of $783 billion in expected sales this year. This represents the seventh consecutive year of positive growth in the restaurant business since the recession. Your restaurant is relatively new, but it’s doing well and it’s starting to experience the normal growing pains of all small businesses at this point. Then what’s the problem with getting approved for restaurant business loans?
SOME BANKS VIEW CERTAIN INDUSTRIES AS LESS STABLE
It’s very possible that the bank you are trying to work with has blacklisted restaurants from receiving any kind of small business loan. This is all too common with small businesses in certain industries. Most of this is based on economics spanning ten even twenty years into the past, before you were even in business. It’s not fair, but it’s the reality of certain traditional lenders.
THERE IS A FALSE BELIEF THAT MANY RESTAURANTS FAIL
For years, the myth that restaurants are prone to business failure have been going around. Sure, it may seem more visible when a restaurant goes under, because it’s usually on Main Street and everyone’s favorite place, but this doesn’t mean all restaurants fail. In fact, there are many small and large restaurant groups that have been around for decades. They can be a safer bet than other small business ideas. A Forbes article points out that The Small Business Administration puts all small business failure at around 31% in the first two years, but restaurant failure is less than that at just 30%.
BANKERS THINK RESTAURANTS PAY LOANS LATE
Banks are in the business of making money, therefore they look for small businesses that can turn a profit and pay back their loans on time over a period of time – with interest. Because small businesses like privately owned restaurants tend to have fluctuations in their earnings, don’t care much for the administrative aspects of running a business, and strict regulations force them to maintain quality environments; they think they will be paid late. If a restaurant owner is responsible and pays his loans on time then, with an occasional slip-up, this should not be a real issue.
HOW CAN RESTAURANTS GET THE SMALL BUSINESS LOANS THEY NEED?
If you think that you may be facing one of the above scenarios, it’s not time to give up on your dreams of restaurant expansion. The good news is that there are multiple small business loan programs available for restaurants, even those who have credit challenges or don’t like to spend a ton of time filling out paperwork. After all, you are in business to create happiness in others with mouth-watering meals and your keen sense of hospitality – not to spend your time stuck on the computer or waiting in a stuffy office for a loan officer to scrutinize you.
Consider a restaurant small business loan From United Capital Source, that’s based on the equity you have already invested in your restaurant. You may not need any collateral to qualify and nothing is at risk. Equipment and supplies that you have for your business, and the ongoing maintenance of your restaurant are a number one priority for staying in business. If you are leasing restaurant assets or the building you are currently in, a small business loan can help you to stay ahead of your payments. There’s nothing like peace of mind knowing you are secure where you are and can build on your foundation.
If you have a point of service station with a credit card machine, as most restaurants today do, you can also get merchant cash advance loans to fund your restaurant. These are factored against your earnings and can help you with flexible repayment terms, as we know that restaurant patrons can be very fickle and earnings unpredictable at times. During slow periods, you can count on this money to keep things afloat, then when things pick up again, as they always do, you will still have a solid source of incoming revenue. This helps you to reinvest in your business.
Bad credit restaurant loans are also a possibility for your small business, if you have ever faced financial difficulties in the past. It can happen to any restaurant owner when business is slow or if a personal crisis causes you to shut down operations even for a few days. In most cases, you won’t even have to submit to a credit check, and by making scheduled payments on time you can actually improve your credit score.
WHAT BANKS WON’T TELL YOU, BUT YOU KNOW
Traditional banks won’t tell small business owners of restaurants why they won’t fund them, for the most part. They tend to believe the myths about restaurants instead of taking an actual look at the outstanding history that your restaurant has and the positive impact it makes on the community. They are only in it for the money they can make off your hard work.
Instead of going through the frustrating experience of getting shot down by your bank, there are alternatives for getting a restaurant small business loan. You will be treated with the respect you deserve and can expect full transparency during the easy application process with United Capital Source. Your business is our business.