Opening your own restaurant is anybody’s dream. However, achieving ones’ dream requires pure determination and risk taking. People who are in the restaurant industry are there because of their passion for it. One of the matters that stop restaurant owners from acquiring the business loans they necessitate, whenever they need it, jumps from the common denominator of difficulty that most small businesses tackle when applying for bank loans. The condition of the economy today, has progressively more restaurant owners acquiring funds out of their own pockets, thus risking their financial stability. Choose your Restaurant Loans: Traditional Vs. Alternative
There are two main types of lenders:
·Alternative – includes cash advance providers and factors
·Traditional – this includes banks and other credit unions
Traditional lenders offer the best rates and terms for restaurant business loans according to veteran restaurant owners. Traditional loans also have different types such as business credit cards, loans and lines of credit.
To get working capital in a quick manner, alternative lenders become a better option. A famous alternative financing method is a merchant cash advance. This lets you acquire upfront cash from a merchant cash advance provider, who will then subtract a percentage from your future credit card sales.
What to do if you want to apply for a Traditional Loan
·Pick a Restaurant Theme or Concept. This is the first thing that crosses people’s minds when you have the aspiration to open a restaurant. The basic thought process should include the name of the restaurant, menu items, the interior design of the dining room/lounge, and the most vital part is how the restaurant will stand out against competitors.
·Select the Best Location. The success of the restaurant is greatly influenced by the location itself. Know what your market is and if it is feasible to put a restaurant in a particular place.
·Make a Restaurant Business Plan. The business plan is the blue print of the mechanics. An organized and excellent plan will increase your chance of getting the approval for a loan in the bank or business buearo.
·Ace the Bank Interview. Before you go to the bank, make sure all is well and you have prepared for it. On the interview process, make your first impression and make sure you are very familiar with your blue print.
·Be Prepared and Fully Understand What you are signing. Even with a glamorous business plan and restaurant location, collateral may still be a requirement. This includes personal properties such as your house or lot. Think several times before signing as you will gamble your personal assets.
Traditional Loan not Approved? Go for the Alternative with Hard Money Lenders Tampa
If your business is in a place where you cannot qualify for a traditional business loan but the necessary money must be obtained, you may go for a hard money loan. Here are some tempting offers they provide:
·Close deal in 10 days from the time disclosure package is signed
·Requirement of 20% down on purchase
·80% Loan to Value on cashout
·24-48 hour approvals
·Allow lending to people even with bad credit history with no minimum score requirement
·With only 12-15% interest
·Four to five points (Five points for loans 50 thousand and under 20 thousand minimum loan amount)
·Investment or Commercial Properties Only
·Lending is allowed only in Tampa Bay Area
·Balloon terms of two years or less
·With prepayment penalty of one year
·Renewals are available at the end of the loan term without closing a second time
·With maximum loan amount of one million
·Available blanket loans on several properties
·Allow foreign investors
·Property must be insured
·Full application first and other necessary requirements before release of pre-Approval letters