Why Restaurant Financing Makes Sense

Restaurant Finance Growth
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In honor of the upcoming Restaurant Finance & Development Conference in November—Sin City, here we come!—I thought I’d put together a post explaining why restaurant financing is so important.

It’s fair to say that it’s not cheap or easy to run a restaurant. You’ve got to stock supplies, you’ve got equipment that gets a considerable amount of wear and tear in the average year and you’ve got furniture and fixtures that don’t last nearly as long as they would in an environment not filled with people eating and drinking and thus spilling everywhere. You need to have enough capital to keep your business going, given that restaurant profit margins aren’t usually legendary.

So that brings us to finance. You need it, quality lenders provide it. But what specific situations should you be looking for financing in?

  • In any situation where your cash flow is lacking, it’s wise to look at a working capital loan* or similar financing that can bridge the gap. It can also be useful for everything from hiring to paying taxes to marketing, leaving your cash reserves free for major projects or emergencies.
  • If you need equipment—say a new oven that can handle increased demand, or a deep freezer capable of keeping a 30 pound lobster and its beady little eyes cold until you can serve it to a group of bright-eyed Mainers—then equipment financing is the way to go. With a quality lender and good payback terms, a lease can be both affordable and quick, allowing you to upgrade right now.
  • If you’re a franchise restaurant and you need financing for a re-model or re-imaging, they can do that, as well. It’s actually remarkably easy to get your hands on that kind of financing, and you will have the blessing of your franchisor if they have an existing relationship with a lender.

So that’s why restaurant financing makes sense. Have you used it?


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*Working capital not available in the following states: AK, DE, ND, VT