What are Restaurant Business Loans?
As the name suggests, restaurant loans are business loans designed to serve as financing options for restaurants. Unarguably, running a successful restaurant not only requires having a great concept, it also requires enough capital to bear all the operating expenses, and more. A restaurant loan can serve as a funding option to cater to all the needs of your restaurant.
Considering the expenses of running a restaurant, obtaining a large sum of money from banks can be a daunting prospect. Obtaining restaurant business loans from a third party funding organization could be a better option for you. Requirements to obtain a loan vary across funding sources, as are repayment terms. But generally, lenders will only approve a restaurant business loan if your proposal is convincing.
Available Options for Restaurant Business Loans
Restaurant owners are eligible for several types of restaurant business loans, depending on the purpose of the loan application.
Business Lines of Credit
A business line of credit works in a similar way to a normal credit card. It could be a better financing option if you have several needs to meet gradually. Instead of getting a huge sum of money at once, you can borrow a specific amount for your restaurant. For example, if you get approved for a business line of credit loan of $120,000, and you require only $25,000 for the first project in your restaurant, you can withdraw that amount and your monthly repayment will be based on the amount withdrawn.
This is unarguably the most flexible and easiest financing option for restaurants, as it has no withdrawal restrictions and offers a lower interest rate. A business line of credit has its shortcomings, however, including administrative fees and the fact that they are only good for short-term projects.
Small Business Administration (SBA) Loans
A Small Business Administration loan is designed to support small business owners. An SBA supports both new and existing restaurants with funds. They often work with other lenders and banks to make loans available to small restaurant owners.
The requirements to get approved for SBA can be quite tough and worrisome. You might require a higher credit score (650+) just to get approved for a small business loan. Also, as part of the requirements to qualify for an SBA loan, your restaurant must be licensed, and meet the standards for number of employees and annual revenue. In most cases, SBA funding take longer to be released, even after you’ve offered collateral and surety.
Restaurant Equipment Financing Loans
Acquiring the perfect restaurant equipment could be a game-changer in terms of the performance of your restaurant. Efficient restaurant equipment can be expensive for owners, which is where a restaurant equipment financing loan can come in handy. These loans are designed to help restaurant owners purchase all the equipment they need for their restaurant.
Some equipment loans can cover up to 100% of your equipment purchase, which is certainly a better option for you. These restaurant loans offer a considerable repayment duration that can be extended (at increased interest).
Restaurant-specific loans are offered by banks and traditional lenders to help restaurant owners meet various needs. These loans can be used for specific purposes, ranging from equipment purchases to restocking inventory. A restaurant-specific loan can run as high as $750,000 or more. The interest rate depends on the amount obtained and the repayment time agreed upon.
Requirements for Restaurant Business Loan Approvals
You should always keep in mind that restaurant owners often apply for loans. As such, there are certain standards and requirements that can make a restaurant business loan approval easier. To better facilitate your loan approval, you should be eager to provide the following:
- Operating background of your restaurant
- A financial statement, covering revenues and profits
- Credit card scores (personal and business)
- A personal guarantee
Also, when you’re looking to apply for any restaurant business loan, there are several documents you should be ready to provide. They include:
- Personal background and financial statement
- Business financial projections
- Restaurant ownership documents
- Business certificate/license
- Statement of loan application history
- Income tax returns
- Your business overview
Enjoy Amazing Restaurant Business Loans from Globelend Capital
Unarguably, many difficulties are often associated with acquiring business loans – and Globelend Capital strives to put an end to them. Globelend Capital offers restaurant business loans in the range of $25,000 to $500,000 to proven individuals/business owners. A loan by Globelend Capital comes with friendly repayment terms and a low interest rate, with fair paybacks times ranging from six months to five years.
In less than 24 hours after application submission, you’ll know the outcome of your loan application. If you’re approved, you can expect the funds in your account a few days after approval.
Globelend Capital is transparent in its loan processing, and you can count on us for your restaurant business loans. If you’re interested in one, apply now!