If you have the dream of opening a restaurant, you will most likely need to come up with money before you can get your business off the ground. While finding legitimate sources of restaurant financing can be difficult, it is not impossible. Many restaurants open up every day, and you simply have to be willing to look around for the money you need. A good credit record, plenty of experience in the food service industry and a winning business plan are essential for this process.
Create a business plan that showcases your restaurant idea. In your business plan, you need to show why your restaurant is different from all of the other ones out there. Many banks are not inclined to easily loan money to restaurants, and you really have to have a solid idea before they will even consider it. In your business plan, you need to make realistic projections and show how you plan on competing in the market. The bank will want to see how you have planned for getting your business off the ground.
Visit lenders to inquire about financing for your restaurant. If you can find banks that work with the Small Business Administration, they would give you the best shot at getting approved. The SBA has many loan programs that are easier to get approved for because of the government guarantee that comes with them. Take your business plan with you and be willing to talk to a loan officer if they want to find out more information about your business.
Prepare to make a down payment on the purchase of your restaurant. Even if you are able to secure financing for your restaurant, you will most likely have to come up with a large portion of the money in cash. Lenders like to know that you have something invested in your own business, and you may be required to come up with at least 20 percent of what you need in total. This will have to come from personal savings, or you could use a home equity loan to get the money you need for this.
Complete loan applications with the lenders that you are interested in working with. During this process, you will have to provide the lenders with a great deal of personal information and information about your business. You should try to apply with several lenders so that you increase your odds of getting approved somewhere.
Approach private investors such as your friends and family members to invest in your new restaurant. Even if you can get a loan from a traditional lender, it may not be in the full amount that you need to get started. If you can find a business partner who is willing to invest in you, this can make it easier to come up with the money you need. It may even help to find a partner when applying for loans. Getting a cosigner on the loan can increase the odds of approval.