Restaurant Financing

A restaurant is a cash-based business with a high inventory turnover and overhead costs. Since a restaurant can’t make money without having money, many restaurant owners find themselves seeking business loans and lines of credit with a regular basis to fund their restaurants.

Unfortunately restaurant financing can be very difficult now, because lenders are extremely cautious about loaning money. Trying to get a traditional loan can need using personal assets as collateral or involving co-signers, and seeking investors can further complicate an already complicated business.

Regardless what kind of restaurant you operate, you can find funding options for it.

Types of restaurant you could find financing for:

  • Fast food restaurants
  • Pizzerias
  • Coffee shops
  • Casual dining restaurants
  • Fast casual restaurants
  • Cafeterias
  • Steakhouses
  • Ethnic and family style restaurants
  • Fine dining restaurants
  • Bars, pubs and brewpubs
  • Food carts and trucks


Merchant Cash Advances

One alternative many people are using for restaurant financing are merchant cash advances.

Merchant cash advances can be used almost like a line of credit, for times when the restaurant is doing poorly or just needs a cash injection to stay comfortably in business. Things like purchasing new inventory or paying the staff may need restaurant financing during lean times.

With a merchant cash advance, the cash can be available almost immediately.

A merchant cash advance allows a merchant company to buy a portion of the restaurant’s future sales in exchange for cash.

This cash can be used in any way to support the restaurant. After the cash is received, the merchant service will collect a part of the restaurant’s future sales every month until the amount owed has been paid back.

This type of restaurant finance is especially useful because it is flexible. If the restaurant doesn’t make a profit some months, the merchant will take less money. The merchant has an interest in keeping the restaurant profitable.

A merchant funded restaurant finance is easy to get compared to a traditional restaurant finance. This is because a merchant finance only looks at the restaurant’s revenue and not its assets. Many traditional lenders not only need to see revenue and assets, but they may require a form of presentation or a revised business plan to prove that the restaurant will not need another loan. That said, a merchant cash advance also looks for at least nine months of operation. This means that a merchant cash advance may not be suited towards new restaurant financing.

Financing a Restaurant Start-up

For those seeking new startup restaurant loans, a merchant service may make an exception if the business owner has previously shown good receipts for a similar business, or has a solid business plan and a history of successful businesses.

Other than that, new restaurant financing might need to be secured under a more conventional loan platform.

The merchant service should still be consulted to see if there are any ways that a cash advance can be offered to a new business.

Restaurant Equipment Financing & Loans

When you need to finance new or used equipment for your restaurant’s kitchen, or furniture for the dining room, there are many appealing alternatives to traditional bank loans.

Capital flow is about supply and demand. Restaurant financing has become easier due to all the wealth in the world.

Wealthy Lenders
Modern capital has become “liquid” by flowing 24/7/365. This has increased the amount of money available for financing a restaurant. Traditional banks are tied to the outdated structure of yesterday. They make loans to large corporations. The bank loan process is long, tedious and full of paperwork.

Newest Restaurant Amenities
A restaurant needs to appeal to the most up-to-date fashions. People want to eat in the most trendy environments. New restaurants must attract customers. Financing for restaurant can pay for these expenses. Positive word-of-mouth will keep the restaurant in business. Parking, exterior painting, lighting, seating and food preparation all cost money. A great restaurant has great employees.

Customer Service is King
People want immediate service. While diners are eating – they can go online and write a review. Restaurants must cater to the details. Competition is fierce for the attention of the public. Financing for restaurant must be immediately available to take advantage of opportunities. A new location may be available. A new food may be popular. All of these items require financing.

Merchant Restaurant Financing
Fresh food is a necessity for staying in business. Purchasing a new refrigerator or freezer can ensure that ingredients remain fresh. Laws require certain investments. Financing a restaurant is a very fast process nowadays.
Electronic innovations can make a restaurant more festive or help with order processing. Merchant financing can pay for the purchase of electronic devices. It might be an upgrade to a small television, a better remote or a video game. Any of these can improve the ambience of a restaurant.

People can be very picky with accoutrements. Customers demand a clean environment. Financing for restaurant can be part of regular cleaning and maintenance to create the best and safest eating environment. Merchant financing can upgrade the interior and exterior of a thriving restaurant. It can help with expansion too.

Advantages over Traditional Financing
Merchant financing takes a percentage of a restaurant’s credit card sales. This means the lender has a stake in the long-term success of the enterprise. Here are other advantages over traditional financing:

Better for newer restaurants
Faster process
Fewer requirements
Less paperwork

Merchant financing is the alternative method for making sure a business has access to readily available capital.

How to finance a restaurant

Anyone who wants to learn how to finance a restaurant has to be creative when looking for cash flow. After all, no matter how business is going, staff have to be paid, inventory needs to be maintained and day-to-day operations have to continue. The recession may have affected credit markets but a merchant cash advance gives business owners a chance to not only stay afloat but also expand.

Reliable Funding
Today’s credit market isn’t as vibrant as it was a decade ago. Anyone with a sub par credit score or history may be rejected for funding. A merchant cash advance offers business owners and managers a chance to grow even if they have been rejected for traditional bank loans. In exchange for funding, a business gives a portion of future credit card sales to the lender. Such funding options give the restaurant the chance to expand and grow even while other groups struggle. This could mean the difference between staying open and going under.

Sales Transaction Keeps People Safe
No one wants to lose their restaurant because they put it up as collateral or wants to see their business credit rating decline because of a slow season. A merchant cash advance is a sales transaction that stays off of credit reports. This protects the restaurant, increases cash flow and lessens the amount of risk.

Quick Approval
Anyone looking to learn how to finance a restaurant understands that quick approval is important. There is little paperwork linked to this process. All business owners need to do is provide business plans and financial statements. Lenders only want to understand what monthly credit card returns look like and the history of the business. In return, the restaurant owner can expect approval and funds transfer in as little as a week. Thus, cash flow increases quickly and efficiently.

Restaurant entrepreneurs need to act now and contact Financing for Restaurant. This funding goes a long way for any owner or manager trying to get a business off the ground. These funds can go to good use paying for inventory and paying suppliers. Anyone that wants to learn how to finance a restaurant needs to look into a merchant cash advance. This is a quick and reliable way to secure necessary funding.