Getting funding for a restaurant this year of 2008, is definitely harder on a national level is more difficult then ever before.
Why You Will Find It Difficult To Get A Loan
Unfortunately bank loan officers do not like to do restaurant financing! This year of 2008 is a very tough year, foreclosure rates the highest ever in the history of the United States, a credit crunch due to the mortgage crisis, lenders cherry picking their loans, even denying borrowers with good credit.
So as if the food and hospitality industry was not already difficult for getting restaurant loans, it is much more harder to get loans then ever before due to the recession that is happening currently around major cities in the united states, gas prices going off the roof creating a domino effect in many many industries, consumers not spending as much, going out less due to super high gas prices.
Restaurant failure is the main reason why bankers are Leary of lending money to a new start up restaurants, if the borrower applicant does not have a proven track record in the food and hospitality business.
Success for food service businesses is viewed by bankers as minimal. Their hesitation is due to higher failure rates in the industry for new restaurant owners with no experience opening a restaurant. Unless you have enough collateral to make the loan risk free, banks will usually not approve your loan. This belief is not well founded, since the data is skewed, therefore, it is not accurate and hurts you when you apply for a loan.
Traditional money lending institutions are Leary of lending money to a new restaurant, if a the borrower applicant does not have a proven track record in the food and hospitality business.
What Can You Do To Increase Your Chances Of Success With Your Restaurant
-Restaurant Consultants — Set aside some money from your working capital to consult with one. They will help maximize your chances for restaurant success and minimize your chances for restaurant failure; this is the main reason to to speak to a restaurant consultant.
-Restaurant Training — Seek out those companies that provide restaurant training
-Restaurant Marketing — Become an expert in restaurant marketing, consult with someone who will help you create a great restaurant marketing plan. Implement a moving targets and birthday marketing campaign to generate immediate cash for your restaurant, which you can find out more info with the author of this article. Our website provides info on Desert diner
-Restaurant Management Training — Seek a company that will train your restaurant manager.
-Restaurant Accountants — Seek out CPA accountants that specialize with restaurant accounting software and restaurant accounting systems.
-Restaurant Floor Plan – Warning, pay attention to how you layout the front, back, kitchen area! Could cause to lose profits if you do implement a good efficient cost effective floor plan.
What Are Your Restaurant Funding Options & Sources
* Selling stock
* Venture capital
* Loans from relatives
Insurance policies cash values
* Credit from food suppliers
* Personal savings
Collateralized loans from your personal assets
* Credit from equipment suppliers
Up till now if you are having problems getting financing for your existing restaurant, your options were limited. There is a product called the business cash advance or merchant cash advance that is a possible solution to you when you find yourself being turned down for restaurant funding.