Most restaurant business experience cash crunch every now and then due to low working capital. Ready cash is often required by restaurant owners to maintain stock, prepare the restaurant for the upcoming season or to hire seasonal staff. Inadequate funds often result in restricted business growth. Finding an ideal finance option to meet the restaurant financial needs is the only solution for restaurant owners. Whether you are start-up a business or an established one, there are plenty of financing options for restaurant owners available on the market from both traditional banks and non-bank lenders.
Small Business Administration Loans ( SBA Loan)
Restaurant financing that is backed by the SBA is one of the funding options available for the owners. These loans are not advanced by the SBA but are backed or supported by the institution. This type of finance is hard to acquire, but sometimes you may get lucky and get approved. SBA support loans need both personal assurance and collateral to back up the funding. The SBA loan often pursues all available individual assets of the borrower to back up the loan which means the loan will restrict you from acquiring further funds by pledging your properties even if there is a funds emergency.
Line of Credit
A business line of credit is exclusively designed to meet particular needs of your business. One of the best features of the line of credit finance is you will only pay for the funds used by you. A line of credit is the smartest way of funding even if your business is not in need of any funds immediately. This finance can be used when any business expansion opportunity arises. The funding option can be of great help for restaurant owners as the funds can be used for bulk purchasing, meeting short-term funds shortage and maintain adequate working capital.
Leasing of Equipment
Restaurant owners can finance or lease the equipment owned by the company or the business owners to avail funds. Leasing involves availing a lump sum amount of the equipment and repaying the same in affordable monthly payments. Leasing period can vary between 12-60 months and can be a good funding option for restaurants. Equipment leasing offer tax benefits also apart from providing funds quickly.
Unsecured business loans are loans advanced for business which can be spent for any purpose. However, this funding option is one of the viable options for restaurant owners as it can be availed quickly. The business loans can be availed by restaurant owners with both good and average credit rating making it popular finance option available for small business. However, business loans can prove to be highly expensive in the long run.
Merchant Cash Advances
A merchant cash advance is possibly the best financing option for restaurant owners as it is not a loan but advance availed against future sales of the business. The merchant cash advances can be availed by restaurant owners with average credit or even bad credit and do not involve any collateral making it one of the best options for restaurant businesses. The amount advanced is collected as a portion of credit or debit card sales of the business on a daily basis.