Catering Business Loans & Financing

Catering Business Loans & Financing

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Caterers in the United States face a heavily gig-focused business model. In a post-COVID-19 environment, many residents in urban areas are becoming more comfortable with ordering catering services for their private and professional events. According to the August 2021 Industry Statistic report, the American Catering industry is currently worth 15.4 billion with an expected increase of 8%. Owning a catering business can take a lot of work, a large amount of passion, delicious menu options, and innovation to maintain its success. Business owners in this category have all the creativity to create beautifully decorated plates with a unique blend of flavors that bring customers back for more. It can be a lucrative business if you have a consistent supply of customers. Chances are catering businesses endure seasonal fluctuations in business. Summer and spring weddings, winter holiday parties and themed private events can drive demand. During the slow seasons, utilizing a catering business loan can enhance your business for the better. Catering companies have a variety of loan options to choose from based on their financial needs. First Union has provided funds to many businesses run by passionate owners who enjoy providing great food, drinks, and service to their customers during their special events. We are ready to help small and growing catering companies attain the necessary funds needed to be successful.

What is a Catering Business Loan?

Catering Business Loans are industry-specific loans offered by traditional and non-traditional lenders to support a range of business needs. Like any business within the foodservice industry, catering companies experience broken equipment, employee turnover, growing pains, and supply chain hardships. The best solution for small and growing catering companies is acquiring working capital to enhance their business endeavors.

First Union is here to help! There are a variety of loan options that can help your catering company thrive.

Types of Catering Business Loans & Financing Options

Once you've confirmed the need for funds provided by a lender, consider the factors that are most important to you. Business owners should look for loans that offer great interest rates, down payments, and collateral requirements. Here are the more widely used loans to help fund growing food truck businesses.

  • Equipment Financing: Equipment loans are loans used to buy business equipment. Businesses will often need to purchase, replace, repair, or upgrade various kinds of equipment to process, manufacture, or produce their product.

    Equipment can include such items as cooking appliances, phone systems, service trays, utensils, vehicles (for commercial use), specialized equipment, and more.

  • Business Line of Credit: Banks, financial institutions, and other licensed lenders often extend credit to creditworthy customers to address fluctuating cash flow needs of the customer. The maximum of funds a customer is allowed to draw from a line of credit is typically called the credit limit or overdraft limit. The term credit limit is commonly used for credit cards whereas the term overdraft limit is more commonly used for bank accounts.
  • SBA 7(a) Loan: 7(a) loans tend to be the most common within the SBA family of loans. With access to up to $5 million in working capital for a term of 25 years, numerous industries find that these types of loans are undoubtedly adequate for their needs. Interest rates tend to be between 7-8% depending on trade and the nature of your business. Most businesses who opt-in for an SBA loan will fall under this 7(a) category.

    Other SBA Options

    SBA Express Loan: Considered the simple way to receive expedited, amortized government-guaranteed financing for your small business. This category of the SBA loan family allowed borrowers to receive up to $350,000 in the capital in the form of either a term loan or line of credit.

    SBA Microloan:This loan program provides funds up to $50,000 for borrowers to purchase inventory, supplies, or equipment, or to use as working capital loans. This is a great option for businesses run by women, minorities, veterans, low-income, or other underserved groups.

How to Apply for Catering Business Loans: Requirements and Getting Started

How to Apply for Catering Business Loans: Requirements and Getting Started

If your business has come to the point where funds are needed to generate a greater return of profit, acquiring a small business loan may be the best option.

First Union Lending is here to help.

Submit your business information below to determine if you qualify for any available small business loans. Our Funding Specialists will analyze your qualifications and will reach out to walk you through the next steps.

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While each of the available loans have varying qualifications, lenders will typically ask for the following general information:

  • Business Operation History
  • Business Revenue Statements
  • Personal & Business Credit Scores
  • Collateral, if needed

In the past, loans for businesses within the food services industry were harder to acquire because the industry is viewed as risky. Traditional lenders and banks often involve collaterals and place a strict repayment schedule - stressing out borrowers in need of capital to grow. Online lenders like First Union are providing catering businesses with the funds needed to grow and become successful.

If you have questions in regards to any catering-related business loans, feel free to give us a call: 863-825-5626

Advantages of Utilizing Catering Business Financing

Advantages of Utilizing Catering Business Financing

Depending on the loan you qualify for, there are many benefits in partnering with a lender to gain funds for your business initiatives. The funds from these financing options can be used to solve a variety of issues that can arise within the foodservice industry.

It provides the working capital needed to buy, rent, or maintain commercial cooking equipment such as appliances, pots, pans, and more. Funds are not limited to purchasing equipment, it can be used to create supply chain solutions. In a post-COVID-19 economy, supply chain shortages have caused many businesses to cut items off their menu due to a lack of products to meet the demand. Funds from these financing options can also be used to partner with new and local vendors to supply needed inventory.

These funds can also be used to enhance your business advertising and onboarding of new employees to better serve your clients. These loans can also be used to expand your business endeavors to better serve your clients in your area. Utilizing out-of-pocket funds can be expensive, look to a lender to finance your initiatives and keep your business running.

Choose First Union Lending As Your Premier Lender

At First Union Lending, we have an unwavering belief that small and medium-sized businesses deserve the right to access the capital they need to succeed.

Our goal is to build long-term, lasting relationships by providing business owners with what they need when they need it. We pride ourselves on being educated, knowledgeable, and caring when it comes to how we conduct business. We have voluntarily acquired much of the same licensing required by traditional banks to cement our fiduciary responsibility to our clients and our work culture.

We are here to consult, help you save, and guide you and your business to success.

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