When you want to open a restaurant, you need restaurant financing to get things started. There are many costs involved with starting a restaurant—location, supplies, food, and advertising, among many others. It is very difficult to fund all of this on your own. Because of this, you need to find restaurant lending companies.
Restaurant lending companies help new restaurant owners to succeed by loaning them the money that they need to start their business. It is important to note that in most cases, these are loans and you are required to pay the money back.
Financing a restaurant is not difficult, but you do need to know what restaurant financing services look for:
1. A good credit score. Restaurant lenders want to see that you have paid back your debts on time in the past.
2. A solid business plan. This shows the restaurant funding company how you plan to pay back their money.
3. Successful people involved. If you have people who have been successful involved with your business, restaurant finance companies are more likely to loan your money.
Action Steps
The best contacts and resources to help you get it done
Seek out angel investors to secure your restaurant funding
Many restaurant start-ups look to angel investors for their funding instead of a restaurant lending company. Angel investors are either an individual or a group of individuals who use their money to fund new businesses. They do this in exchange for a share of the profits.
I recommend: While it is often difficult to find angel investors in the restaurant industry, they are out there. The
Angel Capital Association offers a directory of angel investors. You can easy find one that is located in your state. The
Go BIG Network offers an easy way to advertise your funding needs to potential investors.
Use a venture capital company for your start-up money
Venture capital companies are similar to angel investors, but they are legally a business, not an individual. These companies are usually looking to fund high-growth businesses in need of $500,000 or more.
I recommend: VCLocator.com offers a power search feature that allows you to search venture capital firms by a wide variety of criteria, including type of funding and location. By subscribing to the
Restaurant Finance Monitor, you will gain greater knowledge of what venture capital companies specialize in the restaurant business.
Secure a loan from restaurant financing specialists
When you have your business plan ready, you can begin to contact banks that specialize in restaurant lending. Contact a business that has a good reputation.
I recommend: Wells Fargo is a national bank that offers restaurant finance services.
The SBA Loan Group also offers this service.
Tips & Tactics
Helpful advice for making the most of this Guide
- If a restaurant lending company turns you down, do not be afraid to ask them how to make your presentation better. This advice may help you to secure a loan with another restaurant financing company.
- Make sure that your company is ready to handle the responsibility that comes with having a loan. You should have a solid plan for how you are going to pay that money back.
- A well-written business plan is essential for getting financing from a restaurant lending company.
The official source of Restaurant Finance is the Restaurant Finance page at Business.com
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