Lending & Finance

 

05 17 2017

How to get a restaurant business loan

05 17 2017

3 Goals to Accomplish Before Getting a Restaurant Loan

Many would-be restaurateurs today find that getting a business loan isn't as easy as it used to be. After the recession, many banks and other traditional financiers cut down on lending to budding entrepreneurs, NerdWallet reported.

To obtain the necessary funds, prospective restaurant owners turned to alternate strategies. Asking friends and family for the cash to get started is one option, though this is often a route that puts undue stress on important relationships.

Another method is simple persistence with traditional routes. The biggest drawbacks here are that, first, there's no guarantee you'll be successful in getting a loan; and second, the lending process has greatly slowed down in recent years.

"I think the fastest SBA loan I've ever been able to secure for a client took eight months, and that can really screw up your timetable," Ed Doherty, co-founder, and partner of a consulting company called One Degree, told NerdWallet.

One beneficial means to acquire the financing you need to open your future restaurant is through an alternative lender. One of the biggest advantages of this route is the quick turnaround time - alternative lenders understand the time-sensitive funding needs of small business owners. Another benefit is the relatively easy application process and the fact that not-so-great credit isn't a deal breaker.

If you're planning out your next restaurant and are contemplating how to obtain funding, an alternative lender could be your best solution. But before you begin asking for cash, be sure you have a few things in order:

1. Start with a plan

Having a plan in your head isn't really a plan at all. Your business plan needs to be strategically written out with specific details about how you will achieve success. Without this, the lender will only have a vague idea of how you might be able to pay back the loan over time. For most creditors, an unclear picture of potential future success isn't a strong enough foundation for a loan, The Simple Dollar pointed out.

Before approaching a lender to inquire about a loan, be sure to have a strong, detailed and convincing business plan that you can use to demonstrate your capability to pay back the loan.

2. Get everything in order

Being able to show your lender where your restaurant will be, what the theme is and the menu are all great ways to demonstrate how prepared you are. And the more prepared you are, the more confident the lender will be in giving you funding. The Balance pointed out that location plays a crucial role in the success of a restaurant. If it's hard to get to, or extremely hidden, few patrons are likely to pass through your doors.

3. Invest in yourself

While an alternative lender may be willing to help out with the funding of your new restaurant, it's unlikely that it will want to pay for the entire investment. You need to devote some of your own money into your venture as well. This shows the lender that you're dedicated to your goals, and it helps you to begin strategically thinking about smart ways to spend your money.

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Any applications submitted electronically shall have the same force and effect as if the application bore an inked original signature(s). The above information, together with any accompanying financial statements, schedules, or other materials, is submitted for the purpose of obtaining credit and is warranted to be true, correct, and complete.

 

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To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify, and record information that identifies each person and business that seeks a business loan.  What this means for you: When you apply for a loan, we will ask for your business name, address, and Tax Identification Number.  We will also ask for your name, address, date of birth, and other information that will allow us to identify you.  We may also ask to see your driver’s license or other identifying documents.

 

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The Merchant and Owner(s)/Officer(s) identified in the application (individually, an “Applicant”) each represents, acknowledges and agrees that (1) all information and documents provided to National Funding, Inc. (“NF”) including credit card processor statements are true, accurate and complete, (2) Applicant will immediately notify NF of any change in such information or financial condition, (3) Applicant authorizes NF to disclose all information and documents that NF may obtain including credit reports to other persons or entities (collectively, “Assignees”) that may be involved with or acquire commercial loans having daily repayment features and/or Merchant Cash Advance transactions, including without limitation the application therefor (collectively, “Transactions”) and each Assignee is authorized to use such information and documents, and share such information and documents with other Assignees, in connection with potential Transactions, (4) each Assignee will rely upon the accuracy and completeness of such information and documents, (5) NF, Assignees, and each of their representatives, successors, assigns and designees (collectively, “Recipients”) are authorized to request and receive any investigative reports, credit reports, statements from creditors or financial institutions, verification of information, or any other information that a Recipient deems necessary, (6) Applicant waives and releases any claims against Recipients and any information-providers arising from any act or omission relating to the requesting, receiving or release of information, and (7) each Owner/Officer represents that he or she is authorized to sign this form on behalf of Merchant.(8) I consent to receive direct mail, faxes, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (9) this request is for business and not for consumer purposes.

 

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I hereby certify: (1) the information provided is true and correct, (2) you are hereby authorized to investigate all bank, credit, and trade references, and said references are hereby authorized to release any requested information to you or your nominee, (3) such authorization shall extend to obtaining personal credit profile in considering this application and subsequently for the purposes of update, renewal or extension of such credit or additional credit and for reviewing or collecting the resulting account, (4) this information may be transmitted by us to you and by you to underwriter(s) for the purpose of granting me credit, either electronically or manually, and that by submitting this application, I take full responsibility for transmission thereof, (5) I am over 18 years of age, (6) I acknowledge my rights under the Fair Credit Reporting Act, (7) I consent to receive direct mail, faxes, and e-mails sent by National Funding and its affiliates for the purposes of transmitting account updates, requests for information and notices, and (8) this request is for business and not for consumer purposes.

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