What do you think of when toying with the idea of opening a restaurant? Perhaps the right wait staff and the right uniform for them. Maybe it’s the right type of food to serve, and who to get it from. Or, maybe it’s the right type of background music – if any – to have. The biggest thing you have to worry about does not involve any of the above, but rather something a little harder to come by. You need to get business funding for these things to happen – and that is often easier said than done.
While restaurants are something that are mainstays nearly everywhere in the world, the financial industry doesn’t see them as being “mainstream”, at least when it comes to funding matters. Restaurants can get off to a booming start, and then many see a big drop in revenue. This unevenness is why many consider it to be in the “high risk” category when talk of funding comes up. It is not the business’ fault; this is just something that naturally happens. It also makes it hard to get funding to get started.
There are many things that you can do to obtain restaurant funding – without the hassle of getting a bank loan. There are crowdfunding sites, which are great if you are planning to expand or open another location of a locally loved restaurant. However, for newbies this probably is not a great idea. The funding is not guaranteed, so there is that to worry about. Grants from the government are great – but you have to fit into certain demographics to get them. For many, this is not possible. Local government grants are also around in some areas that are looking to gentrify, but again, this is not available to all.
Cash advances from a merchant account provider are often what merchants go to when they are need of funding. For restaurateurs, this is often the answer. While many require a merchant account, some offer programs that allow just a business checking account. This program allows for an amount of funds to be deposited into your checking account or merchant account, for business usage. Each time you make a credit card sale, a small amount is given back to the provider, repaying the borrowed funds. While there are financial aspects and FICO scores that need to be met, for the vast majority of merchants this is the best way to get extra funding.