How to Obtain Financing for an Established Restaurant

You can obtain financing for an established restaurant.

Even if you own an established restaurant, it can be difficult to obtain financing for expansion and day-to-day operations during slow periods. Although it is certainly easier for an established restaurant to obtain financing, most conventional lenders require a buyer to have sufficient collateral for a secured loan, and lenders usually only consider the depreciated value of fixtures and other tangible assets, rather than reputation and earning potential. You increase your chances of obtaining financing for your established restaurant if you have a good track record, a solid business plan and property to offer as collateral.

Things You'll Need

• Loan application

Instructions

1. Write a solid business plan detailing your restaurant's history as well as your plans for future growth. Explain why you need financing, and outline precisely what you will do with the funds you are requesting. Include sales data from previous years and sales and cash flow projections for the next few years. Attach customer testimonials, a menu, copies of good reviews and any other supporting materials that could help convince a lender to provide financing for your restaurant. Provide a balance sheet showing your personal and business assets.

2. Develop a relationship with a banker, and work to convince her that your business is worthy of financing. Collaborate with your business banker to assemble a loan application package that will sway the bank's decision makers.

3. Apply for secured loans first. These include small business bank loans, and they usually involve lower interest rates than unsecured loans.

4. If your bank turns you down for a secured, low interest loan, apply for unsecured financing sources, such as business credit cards and business lines of credit.

References

• Food and Beverage Underground: Restaurant Financing-Where Is It?