How do I get financing to open a restaurant?

10 Restaurant Financing Options to Consider

1. A term loan from a “brick and mortar” bank.
2. An alternative loan.
3. A small business association loan, also known as an SBA Loan.
4. A merchant cash advance.
5. A business line of credit.
6. Funds or equity from friends and family.
7. Equipment financing.
8. Crowdfunding.

Is it hard to get a loan for a restaurant?

Restaurant business loans can be difficult to obtain because lenders perceive the industry as volatile. However, many lenders offer loans backed by the Small Business Administration (SBA) that can be used to buy an existing restaurant, open a new location, or obtain working capital.

What kind of loan do you need to open a restaurant?

One of the most popular loans for restaurateurs is the SBA 7(a) loan. The SBA 7(a) is a commercial loan and is meant to help small businesses with expenses like real estate, working capital, or equipment. Like all loan programs, there are requisites that restaurants must meet to be considered eligible.

What is restaurant financing?

Restaurant financing refers to money arranged that can be used to open a restaurant, expand a current establishment, or buy a franchise. Restaurant financing can help cover equipment purchases, inventory, payroll, rent, utilities, and other operating expenses.

Do you need good credit to open a restaurant?

A business line of credit is ideal when first opening a restaurant. Lines of credit can range from $5,000 to $1 million. Several payment plans will allow owners to pay it off at their own speed. Most have loan terms between six months to five years.

How do I open up my own restaurant?

A checklist for starting a restaurant

1. Define your restaurant concept.
2. Create a business plan for your restaurant.
3. Research funding options for your restaurant.
4. Obtain licenses and permits needed to open a restaurant.
5. Register your business.
6. Select the right location.
7. Order restaurant equipment.
8. Hire the right staff.

How much would it cost to open a small restaurant?

The average restaurant startup cost is $275,000 or $3,046 per seat for a leased building. Bump that up to $425,000 or $3,734 per seat—if you want to own the building.

How much does it cost to start a restaurant?

How do I start a bar and grill with no money?

Crowdfunding – Crowdfunding is another way that people are able to open bars without any money. They use services like GoFundMe, FoodStart, Kickstarter, and AngelList. Field and Vine in MA used Kickstarter to start out and Swah-Rey also used Kickstarter in FL to open their bar.

How do I get a small business loan for a restaurant?

The US Small Business Association (SBA) offers loans to new small businesses such as your restaurant. Finding a restaurant loan can be easier when you work your loan through the SBA as they guarantee small business loans against default. This means your bank is more likely to take on the risk of your restaurant.

How do you finance a new restaurant?

In addition, an SBA loan can help here. Credit unions are yet another option for financing to start a new restaurant. They are unique in their financing as they often charge you interest on the balance of your loan. So, if you pay it off earlier, then you don’t pay as much in interest.

How do I start a restaurant business?

Along with your restaurant business plan, you should do your homework about the area where you want to open your restaurant. Some potential restaurant owners seek out private investors instead of, or in addition to, small business loans. Landlords may pro-rate rent in exchange for a share of the restaurant.

How to open a restaurant with little money?

Open a Restaurant With Little Money 1 Costs of Opening a New Restaurant. Opening a new restaurant can cost hundreds of thousands of dollars. 2 Funding Based on Your Tax Structure. 3 Angel Investors. 4 Have a Business Plan Ready. 5 Consider Operating a Food Truck. 6 Start With a Catering Business.