As the world starts to open back up again, many restaurants are enjoying a surge in patronage. This makes now a great time to expand your space so you can serve even more customers.
While your revenue will likely increase after your expansion is done, you’ll need an influx of cash to complete your project and hold you over until it starts to pay off. Luckily, procuring restaurant funding is easier than you might think. Here’s a look at five options you may want to consider.
1. Term Loans
If you’re looking for access to quick, easy cash, a term loan is an excellent option. This is a popular choice for restaurant funding since these types of loans offer flexible durations and fixed monthly payments.
When you apply for a term loan, you’ll know upfront exactly how much you need to repay each month so you can easily add this to your budget. Working with a lender like Zinch also allows you to gain restaurant funding even if your personal credit isn’t the best. To get approved for one of our term loans, you’ll only need to have been in business for more than six months and have at least $10,000 in sales each month.
We also offer a hassle-free experience. Once you apply, we’ll give you a decision within 24-hours. If you’re approved, you can expect to receive the money within two to three days. This means you won’t have to waste time gathering up financial documents or wait weeks to receive the money you need to get started on your restaurant expansion.
2. SBA Loans
A Small Business Administration (SBA) loan is another popular option for business owners. While these loans can offer very competitive interest rates, they’re only available to highly qualified borrowers. To gain access to an SBA loan, you’ll need to have a well-established business with a long history of profitability and a high credit score.
Since restaurant profits tend to ebb and flow, this isn’t always the best solution for restaurant funding. In addition, the application process is often long and complex. In many cases, you’ll wait months before you get approval. However, if you’re in a strong financial position and not in any hurry, you may want to explore this option.
3. Equipment Financing
Often, purchasing new equipment is one of the most expensive parts of a restaurant expansion. Whether you need a new high-tech refrigerator or an industrial oven, you’ll want to choose a quality item that will last for many years.
To ensure you don’t have to settle for less, you may want to look into equipment financing. This restaurant funding option allows you to take a loan for the exact amount you need to purchase your equipment. In this case, the equipment itself acts as collateral. As long as you make all your payments on time, you can continue using the equipment. Once it’s paid off, you’ll own it free and clear.
One potential drawback of this type of loan is that the lender will likely repossess the equipment if you fail to make your payments. It’s easy to see how this could quickly make a bad situation far worse, so it pays to enter into this type of agreement with a bit of caution.
4. Lines of Credit
A business line of credit is a restaurant funding option that works like a credit card. When you choose this option, the lender will offer you a set amount of money which you can draw from when you need it. Each time you take a draw, you’ll start a new repayment schedule for that amount.
When you use a line of credit, you’ll typically pay a higher interest rate than you would for a term loan. However, many restaurant owners appreciate the extra flexibility they get from this arrangement. It’s often a good idea to have a line of credit in addition to other types of restaurant funding. This way, if something suddenly comes up in the middle of your expansion, you can take care of it without having to apply for another loan.
5. Merchant Credit Accounts
Since restaurants are often seasonal, a merchant cash advance (MCA) is another popular funding option. This funding is based on your restaurant’s sales, so your personal credit score isn’t even considered. You also won’t have to put up any collateral or make a personal guarantee.
One of the best things about an MCA is that it offers flexible payments. Your repayment amount is based on a percentage of your credit and debit card sales. This means that if business starts to slow down, you’ll enjoy lower payments until things start to pick back up again.
Get Started with Your Restaurant Expansion Today!
Don’t put your dreams of expanding your restaurant on hold any longer. Zinch offers a hassle-free application process and fast approvals. Contact us at (714) 500-6622 to learn more about your options. You could qualify for up to $250,000 in just 24 hours.
