Anyone who's sat across the table from a loan officer and sweated the process of applying for financing knows how tedious the process can be. And if you're hoping to start your own dreamy start-up but haven’t yet experienced the financing gamble, you’re in for a real treat.
What Banks Want
The risk/reward factor that restaurateurs offer are not as attractive to banks as they once were. A tightening economy along with an increase in supplies and food prices have combined to make the job of acquiring restaurant financing tougher than ever. If you’re in the market, expect to give up:
• A personal credit score of over 700
• Additional collateral to handle clear and free assets
• Full financial and tax disclosure
Little-Known Programs
For established chains, a merchant cash advance is one viable option. A monthly average of their Visa and MasterCard sales times 1.5% can qualify for a loan or a merchant cash advance on their past activity up to $150,000 from a financial institution and $750,000 or more per location.
Some programs use the total annual gross sales and apply a percentage against it. Plus, you’re not required to change your credit card processor. Minimum credit scores for approval start at 550. The loan can be funded up to $500,000. And tax and financial statement requirements are only needed for funds over $125,000.
For more info on up-to-date restaurant financing options, check out Restaurant Financing, Up to $750,000.
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