5 Ways to Secure Financing for Your Restaurant Business

Are you seeking options to finance your restaurant? Restaurant financing is an integral part of food business. There are many financing options available in the market. You should determine before hand as to how you are going to obtain funding for your food-joint. Although, you have a wide variety of funding options to choose from, you need to choose the most suitable one based on your requirement and feasibility.

Let's have a glimpse into some of the best financing options for your restaurant business.

Seller Financing

Seller financing, also known as owner financing is a form of financing in which a business owner provides loans for you to purchase his business. In this category of financing, you need to pay a down payment amount, and the seller or owner acts as the lender for the restaurant purchasing purpose. Apart from this, the seller takes a promissory note and a lien on the resources of the restaurant from you in return for the purchase deal.

Restaurant Loans from SBA 

SBA restaurant business loans are one of the most viable options to get funding for your food business. However, you should keep in mind that the SBA does not provide any loan itself. It serves as a guarantee up to 80% of your loan. You can procure SBA 7(a) loans for restaurant business and micro-loans in order to suffice your funding requirements. With SBA 7 (a) restaurant business loans, you can get financial assistance up to a very good amount. Moreover, you can also obtain micro-loans up to 50,000 dollars. For those who are about to start a restaurant franchise, it is imperative to have your franchise on the Franchise Registry list.

Stock-Based Loans

A stock-based loan can be another suitable funding option for your restaurant. You can avail a stock-based loan at affordable rates with great ease and minimal paperwork. However, your business can be at stake if you obtain this type of loan from an unregistered third-party lender. 

Angel Investors

You can also think of giving a kick-start to your restaurant business through funding received from angel investors. To procure a loan from angel investors, you need convince them with a well-researched business plan so that they can feel confident aboou your restaurant business prospects.

Equipment Financing

You can either purchase or lease your restaurant equipment. It's your sole discretion. However, it is always recommended to go for equipment leasing than purchasing, since equipment purchasing is a very expensive affair. By leasing your restaurant equipment, you can save money for performing other tasks of your business. You can secure restaurant equipment loans for both buying and leasing equipment.

Additionally, to start your food business, you can also prefer crowd funding or personal savings. If you aspiring to have a restaurant franchise, you can also get in-house financing from your franchiser. Factoring can be a source of restaurant financing for you too.