How to Secure a Small Business Loan for Your Restaurant
As a restaurant owner, there are times when you need to secure a small business loan to expand or keep your business running. However, with so many types of loans available, it can be overwhelming to know which one is the right fit for your business. That’s where The Tier Group comes in. We specialize in connecting business owners with the most appropriate financial product through our large network of specialty lenders in the food and beverage industry. In this article, we’ll guide you through the top five types of loans you can use to get the funding you need for your restaurant.
5 Types of Small Business Loans for Restaurants
Term Loans – Term loans are a common type of small business loan where the borrower receives a lump sum of cash upfront, and then pays it back with interest over a set period of time. This type of loan is great for restaurants that need a large sum of money upfront for things like expanding their menu, buying new equipment, or renovating their space. The Tier Group can connect you with term loan lenders who understand the unique needs of the food and beverage industry.
Lines of Credit – A line of credit is a flexible type of loan that allows borrowers to access a predetermined amount of funds whenever they need it. This type of loan is great for restaurants that have inconsistent cash flow and need the ability to borrow money on a regular basis to keep their business running. The Tier Group can connect you with lenders who offer lines of credit specifically tailored to the food and beverage industry.
Equipment Financing – If you need to purchase new equipment for your restaurant, equipment financing is a great option. This type of loan allows you to borrow money to purchase the equipment you need, and then pay it back over time. The equipment itself is used as collateral for the loan, which can make it easier to qualify for than other types of loans. The Tier Group can connect you with lenders who specialize in equipment financing for the food and beverage industry.
Merchant Cash Advances – Merchant cash advances (MCAs) are a type of loan where the lender provides you with a lump sum of cash upfront, and then collects a percentage of your daily credit and debit card sales until the loan is paid off. This type of loan is great for restaurants that have high credit card sales, as it allows them to pay back the loan at a pace that’s in line with their sales. The Tier Group can connect you with lenders who offer MCAs specifically tailored to the food and beverage industry.
SBA Loans – Small Business Administration (SBA) loans are a type of government-backed loan that are great for restaurants that need a large sum of money upfront, but may not qualify for a traditional term loan. SBA loans typically have lower interest rates and longer repayment terms than other types of loans, which can make them a great option for businesses with limited cash flow. The Tier Group can connect you with lenders who specialize in SBA loans for the food and beverage industry.
Case Study: Coffee Shop in Austin
A family-owned coffee shop in Austin, Texas, approached The Tier Group for help securing a small business loan to fund the opening of their first storefront. They needed money for equipment, inventory, and staffing, but were struggling to find the right lender. After discussing their needs with our team, we determined that an equipment financing loan would be the most appropriate solution for their needs.
The family was able to secure an equipment financing loan with favorable terms through our network of lenders. With the funding they received, they were able to purchase the equipment they needed to open their storefront, hire staff, and purchase inventory. Today, their coffee shop is thriving, and they credit The Tier Group with helping them secure the funding they needed to make their dream a reality.
Is a Business Loan Right for You?
Securing a small business loan for a restaurant can be a daunting task, but it doesn’t have to be. By knowing your options and working with the right lender, you can secure the funding you need to grow and thrive. At The Tier Group, we are dedicated to connecting restaurant owners with the most appropriate financial product through our large network of specialty lenders in the food and beverage industry. Our experienced specialists are ready to assist you in finding the perfect funding solution for your restaurant’s unique needs. Don’t hesitate to reach out to us today to take the first step in securing the funding you need to achieve your restaurant’s goals.