Restaurant business loans and financing

Restaurant business loans and financing

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Did you know running a restaurant is considered one of the most difficult business ventures? It takes a lot more than cooking to keep a restaurant afloat in this current market. Traditional lenders tend to view restaurant business loans as risky investments, thus making acquiring funds a tedious process.

First Union has provided working capital to many restaurants run by passionate owners who enjoy providing great food, drinks, and atmosphere to their customers daily. We are ready to help small and growing restaurants attain the necessary funds when needed.

What is a Restaurant Business Loan?

Restaurant business loans are industry-specific loans offered by traditional and non-traditional lenders to support a range of business needs. Many restaurant owners are familiar with the hardships within the foodservice industry such as broken equipment, employee turnover, and customer gripes. The best solution for small and growing businesses is to acquire working capital to enhance their business endeavors.

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

Types of Restaurant Loans & Financing Options

There are many factors taken into consideration when choosing the best types of loans relevant to the food and restaurant industry. Business owners should look out for loans that offer the best interest rates, down payments, and collateral requirements. Here are some of the more widely used loans that have helped restaurant owners:

  • Business Line of Credit: Banks, financial institutions, and other licensed lenders often extend credit to creditworthy customers to address fluctuating cash flow needs. 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 504/CDC Loans: 504 loans are extremely specific. For example, if you are looking to purchase commercial real estate or perhaps a large piece of equipment, then this might be the program you fall under. The borrower may need to provide up to 20% of the total value, with the SBA kicking in 40% and the lender the rest. The cap on this type of loan is generally $5 million.
  • 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 allows borrowers to receive up to $350,000 in the form of either a term loan or line of credit.
  • Merchant Cash Advances (MCA): This funding method was made for businesses whose revenue comes primarily from credit and debit card sales, such as restaurants or retail shops. Borrowers can either receive an upfront lump sum of cash in exchange for a portion of your future credit or debit sales, or you can repay by remitting fixed daily or weekly debits from your bank account with ACH withdrawals.
  • Commercial Real Estate Loans: Growing businesses rely on this type of loan to fuel growth or fund business initiatives. This loan is used primarily to purchase or upgrade a commercial property. For a growing restaurant, this is perfect for expanding a building or opening a second location.
  • Equipment Financing: These loans are used to buy and upgrade business equipment when needed. Businesses will often 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, computer monitors, furniture, tools, vehicles (for commercial use), specialized equipment, and more.

How does a Bridge Loan Work

How to Apply for Restaurant Loans: Requirements and Getting Started

If your popular restaurant has come to the point where expansion and new business initiatives will provide a great 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 restaurants were harder to acquire due to the risk factor within this industry. 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 restaurants with the funds needed to grow and become successful.

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

How does a Bridge Loan Work

Advantages of Utilizing Restaurant Business Financing

Depending on the loan you qualify for, there are many benefits in partnering with a non-traditional 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 to allow borrowers to expand their facility or fully renovate it if needed. As time goes on, many restaurants will need upgrades, repairs, new interior decor, or exterior remodeling to maintain or attract customers.

These funds are not limited to just renovations, it can be used to enhance your business advertising and equipment if needed. In today's world, internet marketing is a must to create a name for your business. Having a presence on the internet will help keep your small business populating on Google Search results, thus bringing in more customers.

Keeping up with adapting technological equipment is also a must. Point of Sale (POS) systems are continuously enhanced to better streamline your business. Stay on top of the latest upgrades to the system by utilizing the necessary funds when needed. Easier processing and easy-to-use systems will leave a positive impact on your customer and staff experiences.

These loans can also be used to help keep your kitchen running smoothly. Use the funds to repair or replace essential equipment when needed. 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.

All states we service for Restaurant Business Loans:

Alabama

Alaska

Arizona

Arkansas

California

Colorado

Connecticut

Delaware

Florida

Georgia

Hawaii

Idaho

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Massachusetts

Michigan

Minnesota

Mississippi

Missouri

Montana

Nebraska

Nevada

New Hampshire

New Jersey

New Mexico

New York

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

West Virginia

Wisconsin

Wyoming

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