Commercial restaurant equipment financing is a common way for restauranteurs to get ahead in their business when they’re just starting out or struggling with a slow season. A monthly payment is much more manageable than paying the whole sum at once.

Make sure you gather all of the necessary documents before applying for commercial equipment loans and research what kind of equipment you will need to finance. This will significantly speed up the process and get your restaurant in business faster!

5 Tips For Buying New Restaurant Equipment

There are many factors that go into buying new restaurant equipment, like equipment finance, but the first thing to think about is what you really need. Make sure you plan out your restaurant’s menu before you purchase anything.

After you’ve planned out the menu, you can go through and list all the equipment you will need. Take the size of your kitchen into consideration, as well as the number of people who will be working in it. You want your kitchen functional and efficient, not crowded, and difficult to navigate.

Think about all of the long-term costs the equipment will require. A higher-quality piece of equipment will obviously last you longer and are worthy of considering commercial equipment loans.

It’s also helpful to consider a National Sanitation Foundation certification. Most high-quality equipment will carry an NSF certification, and you’ll know that you are using and serving the safest and cleanest equipment for your customers.

One thing that may cost you in the short term but benefit you in the long run is buying energy-efficient equipment. They may be pricier upfront but will provide you savings monthly in utility bills like energy and water.

When your equipment arrives, be sure to inspect it! You should also familiarize yourself with the warranties (or lack thereof). This can save you a lot of money upfront, and neglecting to go over your equipment immediately could line you up for unwanted maintenance fees later.

Should You Buy New Equipment With Cash?

When it comes to choosing your equipment, new isn’t always better. Especially if you are on a tight budget, going for used equipment can save you lots of money without taking a significant hit on quality. Restaurant equipment is built to last, so a bit of pre-use isn’t a big deal.

Try looking into auctions and estate sales for used restaurant equipment. They can be a great place to find everything from plates and chairs to gas ranges and cookware, all for just a few pennies on the dollar.

Especially when you are first starting out, restaurant equipment collateral loans can be advantageous in place of outright purchasing your necessary items. You may even still have warranty coverage if the equipment is not too old.

If you have decided to become a restaurant owner and buy new restaurant equipment, buy now pay later. Look into your financing options – you’ll own the equipment at the end of the agreement and have time to build up capital while your restaurant is up and running.

How Do I Get An Equipment Loan With Bad Credit?

Restaurant equipment financing with bad credit is more complex than with good credit, but it can still be done. Most lenders have a particular credit score that you need to achieve in order to qualify for a restaurant loan, which can vary. In some cases, you can rent your own restaurant equipment with no credit check.

Since you are leasing a physical object, that’s easy collateral for lenders to work with. Also, it can help your loan application to have other examples that you are not a risky investment. It can be anything from a steady yearly income to your restaurant’s credentials.

So while it can be done, make sure you are ready to prove yourself more than those with good credit. Though this is a safer situation for lenders, they will still want to protect themselves from losing out on a return.

What’s The Difference Between Restaurant Equipment Financing and Leasing?

There is a slight difference between financing and leasing that you should keep in mind. Restaurant equipment for lease is still the lender’s property, and financed restaurant equipment is your own property that you will own after paying it all off.

Just remember that owning a piece of equipment at the end of your financing isn’t always a positive since technology is always moving forward. Depending on the length of the financing period, your equipment may be outdated, and leasing would have been a better option.

On the other hand, if you are looking at a staple piece of equipment that is unlikely to be replaced for a very long time, you may want to finance it rather than leasing it. That way, you will own the piece of equipment at the end and won’t need to pay another leasing period.

Conclusion

Financing and loans for your restaurant equipment are the ideal solutions for any new business owner or if you are struggling with a slower season. Save money upfront and work out a monthly payment plan that fits your capital flow best.

And before you look into financing a whole new range of equipment for your restaurant, make sure you look into used options first. Used equipment can be a huge money-saver. Restaurant equipment is much like a car – it depreciates in value immediately after purchase.

The bottom line is that loans and financing are an increasingly common tool for restaurant and small business owners all over the country and can easily be utilized to make equipment affordable and accessible.

So make sure you do your research, make a list of your needs, and go into this venture organized. Once you have everything planned out and your paperwork in order, you’re ready to apply for the loan. You’ll be up and running soon!

The post 5 Tips For Financing New Restaurant Equipment appeared first on ROK Financial.

Luckily, the solution for many businesses is as simple as getting access to some extra cash flow to get through hard times. If you’ve ever wondered how to get funding for a restaurant, look no further. We’ll cover everything you need to know to figure out a business loan for a pizza shop. From equipment financing to capital injections, you have many options for keeping your pizza shop going until business picks up again.

Best Funding Options For Pizzerias

There are many options for getting the restaurant capital funding that you need to solve your business challenges.

Here’s a list of some of the most common business loan for pizza shop options:

1. Working capital loans
2. Lines of credit
3. Small Business Administration Loans for Restaurants
4. Financing for inventory
5. Financing for equipment

In this article, we don’t have the space to go into the details of each, but make sure you research them all to see what you’ll qualify for.

Recently, a new funding stream for restaurants with cashflow problems has opened up, namely, the $28.6B COVID-19 Grant Program for Restaurants that are part of the US government’s coronavirus response bill.

Getting a Slice of the $28.6B COVID-19 Grant Program

Many restaurateurs breathed a sigh of relief when $28.6 Billion dollars of emergency relief was made available to struggling restaurants earlier this year. The government has made an acknowledgment that most restaurants will return to profitability once paying customers to walk through the doors again.

The government intends for the free federal grants to help replace losses to revenue that business owners have faced since the beginning of the pandemic.

In order to access the grants, you need to be able to prove that your business has experienced “Pandemic-Related Revenue Loss.” The government will decide whether your business fits the bill by comparing receipts from before the pandemic to those you’ve gathered while it’s been ongoing.

There are a number of restrictions that limit which businesses can apply for the COVID-19 Grant Program. If you own more than twenty restaurant locations (regardless of whether they are part of the same franchise with the same name), you won’t qualify for government assistance.

You’re also out of luck if you’ve already applied for the Shuttered Venue Operators Grant program. The two programs can’t be applied concurrently.

Finally, your restaurant needs to be registered as a small business rather than a publicly traded company or a not-for-profit organization.

Pizzeria Business Loan Qualifications & Challenges

If you don’t qualify for government assistance or think you’ll need access to additional cash, you can still go down the route of traditional small business loans for your restaurant.

There isn’t a best bank for restaurant loans, which you should choose depends on the size and nature of your business. In this section, we’ll go over how to qualify for a restaurant loan and our 4 tips to qualify for a restaurant loan.

First, we need to go over exactly what exactly small business loans for restaurants (or an SBA loan for restaurants) are. Owners will get small business loans for a restaurant by going into a brick-and-mortar bank and filling out a loan application. Unfortunately, it’s often quite difficult to get small business loans for restaurants. Covid hasn’t made it any easier.

To maximize your chances of getting a loan, following these four tips is essential:

1. Have a complete history of your finances prepared and on hand when making the application. Being able to answer any question that’s thrown at you will make your loan application more credible and likely to be approved.
2. Do everything you can to get your credit score up as high as possible before making your application. This won’t only affect how likely you are to be approved but also the interest rates you’ll be paying if you do get a loan.
3. Having a fully developed business plan is important. It can show your potential lender that you’re serious about making improvements and are likely to pay them back.
4. Do your research before applying for any loans, making sure your business is appropriate for the loan structure, and your credit is good enough to qualify.

If you’d like more information on restaurant SBA loans, check out our dedicated article at the link.

How To Get Funding For Your Pizza Shop

Although getting quick restaurant funding can be challenging, there are some tricks you can use to jump the line.

It’s worth looking into restaurant financing companies, which are experienced in providing loans in the risky space of the restaurant industry. However, be sure to check out the loan terms to make sure you aren’t being taken advantage of. Some loan companies primarily exist to work with desperate restaurant owners, and you don’t want to get into business with them.

Simple Application For Quick Restaurant Funding

In this section, we’ll go over one of the simplest pizzeria business loans that will get cash into your account ASAP. With ROK Financial, you have options for getting a term loan, line of credit, or SBA loan. Even better, the application is quick, easy, and able to be completed over the internet.

Summing Up

ROK Financial, like the American government and traditional banks, recognizes that the hard times for restaurant owners are coming to an end. As the vaccine rollout continues and more and more people feel safe and confident going out to eat, the industry will recover. That makes every penny they loan out a good investment for them and a potential lifeline for you.

If you make the right financial decisions, you’ll be out of the dark times along with the rest of the country. Just don’t delay and take advantage of the wealth of ways to get a business loan for a pizza shop.

The post Pizza Shop Owners Are Taking a Hit Because of The Pandemic appeared first on ROK Financial.

That’s where we come in. We’ve done the research, finding all the information available on small business loans for restaurants affected by COVID, so you don’t have to. So, what is the best bank for restaurant loans? Are there restaurant financing companies that you can use? Let’s break it down.

What You Need to Apply for Business Funding

Wondering how to get funding for a restaurant or how to qualify for a restaurant loan?

A Small Business Loan, or SBA, is the most common funding option for small businesses. To apply for an SBA loan for a restaurant, you will need to have all of your information ready. To apply for a loan for your business, you will need to provide documentation on your business proof that you are running a for-profit business.

Many loaning companies, especially banks, will need to know why you need a loan and what you plan to do with the money. For example, suppose you are applying for financial aid that is part of a COVID relief program or citing loss of profits due to the pandemic.

In that case, you may need to prove that the pandemic has negatively impacted your business. Proof of impact can include a previous year’s tax documents to compare with your business’ current profit.

You will also need to provide some form of proof that you will repay the loan. Whether it’s your credit score or evidence that your business will significantly benefit from the loan and generate enough profit to repay the loan, the bank is more likely to approve your application if they’re sure that you will be able to repay.

The Minimum Requirements for Restaurant Financing

Now let’s get into the technical side of things. Here are the basic restaurant loan requirements that you will need to meet to be approved for your loan, whether you’re looking for small business loans for bars or need something larger for your cafe.

First, you will need proof that you are running a for-profit business. Second, the company must also be run in and profit in the United States or United States Territories.

Next, the business owner will need to provide their credit score and may be required to undergo a background check. Loans cannot be applied for by a business owned by someone on parole.

To qualify for an SBA, you need to have exhausted any other form of financial assistance. Essentially, this rule means that you cannot apply for and receive multiple loans simultaneously. If you have previously received financial aid for your business, you need to use the entirety of that loan before applying for another.

Finally, the business owner will need to prove that they have invested some form of equity into their business. Equity can include money or property.

If you meet these basic requirements, you will likely be approved for a small business loan for bars and restaurants. However, suppose you are unsure whether or not you meet all of these restaurant loan requirements or need more information on small business loans. In that case, you can speak with a financial advisor to help you better prepare for the application process.

Alternative Funding Options For Restaurants in 2021

No matter what kind of assistance you need, there is likely a financing option available to you. If you do not qualify for an SBA loan or are hesitant to apply for an SBA for any reason, there are other options.

Opening a line of credit through your bank is an excellent alternative to a typical loan, and many financial institutions offer more flexible payment plans. A line of credit also gives you the option to borrow as much money as you need when you need it. By opening a line of credit, you will provide yourself with the protective cushion, knowing that you have a financial lifeline available for you.

Depending on your state, there may be grants available for small businesses to take advantage of. With the massive financial toll a global pandemic has caused, financial assistance options have opened up to lessen the blow that the months of lost or lessened business have forced.

Grants are a fantastic option for small businesses as they do not need to be repaid, so you won’t have to worry about managing payments if your business is still struggling through these unprecedented times.

How to Apply and Get Fast Funding

The best way to prepare for your restaurant loan application is to do your research. First, you will need to find the type of financial aid that will best fit your needs.

For example, if you feel like the future is too uncertain about locking yourself into loan payments, a grant may be a better fit for you, whereas a loan may be a better fit for other business owners. Understanding the type of financial assistance that would benefit you the most is crucial in getting funding for your restaurant.

Once you’ve decided what loan or grant option will work best for you. You will need to do some research on the funding providers and their application process. The general restaurant loan requirements are the same, but some financial institutions may have more or slightly different requirements.

Ensuring you understand and meet all the requirements for financial aid will ensure that you have the best chance possible for approval.

Finally, you need to make sure you are managing your expectations. Many financial institutions and loaning companies have restaurant loan calculators that will give you a general idea of how much money you can expect to be approved for. These systems aren’t perfect, but they can give you a general idea of what to expect if you get approved.

Restaurant Capital Funding: In Conclusion

Now that you have a better idea of getting small business loans for restaurants, you are one step closer to receiving your financial assistance. Making sure you understand the loaning process will help you make a better, more educated decision when it comes time to apply for your loan.

To apply for a restaurant loan through ROK Financial, you can apply directly here or speak with a financial advisor today.

The post 2021 Requirements for Restaurant Business Capital Loans appeared first on ROK Financial.

Small business loans for restaurants are in high demand. Luckily, restaurant owners have several options. There are SBA loan programs, investors, and even grant money available. We cover the best options below and then give you the tools to reach them easily.

So, if you’re interested in a loan for your small restaurant or bar, read on. We’re here to help you navigate the ever-changing currents of restaurant funding in 2021.

Best Funding Options for Restaurants

There are several funding options for restaurants depending on what you need, be it equipment financing, restaurant financing companies, or a traditional loan.

Some of the best financing options are from lending institutions that participate in the U.S. Small Business Association (SBA) Programs. An SBA loan for restaurants and bars provides funding more readily than traditional loans because the SBA guarantees against default.

Having the SBA guarantee makes lenders more willing to take on risks, which means more restaurants will qualify more easily. Small business loans for bars and restaurants from traditional institutions aren’t the only option, though. Alternative lenders tend to have much easier guidelines to get the restaurant industry back on their feet.

For quick restaurant funding, nothing beats finding access to a business line of credit. You can receive access to the funds in a matter of days or less. Even through the SBA program, a bank or credit union usually takes weeks or months to approve a loan. Business lines of credit might be the best choice for you, and you can easily access a variety of offers from alternative lending companies

There is an SBA express loan available that provides funding in 36 hours. However, it comes with higher interest rates, and the SBA doesn’t back as much of the loan. That puts lenders in greater control, and they can put more stringent requirements in place, where accessing this type of loan can be quite difficult.

Restaurant Business Loan Qualifications and Challenges

Now that you have a general idea of funding options, let’s look at how to qualify for a restaurant loan. Whether you go through a traditional bank, credit union, or alternative lender, you’ll need to meet eligibility requirements to receive your loan (based on who you choose to work with). Some of these requirements include:

• The business must be in the U.S. or a U.S. territory
• Must be a for-profit establishment
• Equity (or collateral) to invest  (for traditional lenders)
• 3-6 months of bank statements
• Tax Returns
• Additional requirements set by the individual lender

Equity or Collateral

If you can show that your restaurant is already profitable, or was before COVID-19, then you can meet the equity requirement easily. If you’re newer to the restaurant game, you can use personal collateral instead. It all depends on the lending institution you choose to work with. It’s a good idea to do your research a head of time to make sure you are making the best decision for your business.

Personal collateral could be a home, car, or restaurant equipment you already own. If you’re using personal collateral, lenders may require you to prove that you are considered a low risk borrower.

Individual Lender Requirements

Lenders can place additional requirements on SBA loans. Often, they’ll run your credit score. If you don’t have good credit, you may need to seek out other funding options or be willing to meet a higher interest rate. If you have an already profitable restaurant, though, lenders may waive the credit requirement altogether.

If you’re worried about qualifying for a restaurant loan of any type, check out our tips here. We can help your restaurant qualify for funding even when business is slow or seemingly non-existent like it was during Covid-19.

$28.6B Government COVID-19 Grant Program for Restaurants (2021)

Small business loans for restaurants affected by COVID-19 are in high demand. The pandemic took a noticeable toll on the restaurant industry. To help struggling bars and restaurants, the U.S. government is currently handing out $28.6 billion in grants.

The grant money is available through an application with the SBA. The program provides restaurants with funding that equals COVID-related revenue loss, up to $5 million per restaurant location.

As long as the funds are used by March 2023, applicants need not repay the grant money, making this the ideal choice for those who qualify. However, not everyone will be eligible, and the grant money you receive will depend on your restaurant’s revenue loss. That may or may not be enough to cover all of your costs.

How to Get Funding for a Restaurant

If you don’t qualify for the COVID-19 grant or find it won’t cover all of your expenses, don’t fret. There are still ways to get funding for your restaurant or bar.

And, you don’t need to get in your car and find the best bank for restaurant loans. You don’t even need to call around! Instead, you can let ROK Financial do the legwork.

Simple Application for Quick Restaurant Funding

ROK Financial has Business Financing Advisors to match you to the best financial products for your restaurant or bar. Many of our providers require no minimum credit score, and you can receive approvals in a matter of minutes!

So whether you need equipment financing, a line of credit, or an SBA loan, we can help. Fill out the application and start building your business back up!

The post How to Get a Business Loan for a Small Restaurant (2021) appeared first on ROK Financial.

Why Would you Need a Loan for a Bar?

Opening and running a bar takes money – often more than you may think. A loan can give you the cash you need to cover the expenses and give you time to pay it back as you start making a profit from running the bar. Below are some expenses that a loan can help you cover for your bar.

Renovations and Updates

Whether you’re opening a new bar or are taking over an existing one, you may want to update the space to fit your bar’s vibe. From changing the décor such as new paint and lighting to updating tables, chairs, and equipment, the amount you invest in updating your bar can pay off in the long run.

Inventory

Inventory can add up and while you’re waiting to turn a profit, you still need to pay for the initial stock of alcohol, glasses, silverware, dishes and cookware, if you’ll be serving food. Utilizing a business loan can help you pay for those upfront costs.

Repairs and Emergency Expenses

Equipment breaks, the new stock doesn’t sell, and life happens. In the ideal world, you would have money put aside to handle the unexpected expenses that can – and undoubtedly will – come up. Often times bar owners don’t have that extra cash on hand to cover these types of expenses. Having a business line of credit on hand can help you cover unexpected expenses when the arise.

Business Finance Options for Bars and Restaurants

There are a few types of loans you can try to get, depending on what you plan to use the loan for.

1. Family and Friends – The simplest and simultaneously most complex loan is borrowing from family and friends. While there will probably be less of a paperwork hassle than the other loans and they won’t run your credit score, the situation can be quite complicated if you are unable to repay the loan. Unless you’re willing to make them a partner in your bar, you may want to avoid borrowing from family and friends.

2. SBA Loans for Restaurants – The U.S. Small Business Administration (SBA) gives small businesses and restaurants loans for up to $50,000. It can be a tedious process to get qualified and it can take some time for you to get approved for the loan, but small business loans for restaurants are an excellent resource as the government helps subsidize it.

3. Equipment Financing – Equipment loans are used to specifically cover your bar equipment, such as a new refrigerator or taps. The interest rates are usually low, and the lender has a hold on the equipment as collateral in case you don’t repay the loan.

4. Commercial Loans – Loans from larger institutions such as banks and credit unions are helpful if you need a larger amount than small business loans for bars will provide. Research the best banks for restaurant loans to find the one that will give you the best rates and terms. However, commercial loans tend to have must stricter guidelines. So if you’re planning on applying with a traditional bank, make sure your personal credit is up to par.

5. Alternative Lenders – Online or alternative lenders, like ROK Financial are great options for Restaurants looking to expand. Guidelines tend to be much less strict than traditional lenders, and personal credit scores do not have to be perfect. Also, less paperwork is required and funding can be complete in as little as 24 hours.

Common Challenges for Getting a Loan for a Bar

Obtaining a bar or restaurant loan is not as simple as asking how to get funding for a restaurant. When working with traditional banks, lenders want to make sure you will be able to pay back the loan. To ensure that you can qualify for a loan, make sure you have a business plan, have a good credit history, and work to improve your credit score if you don’t. Here are four tips for how to qualify for a restaurant loan.

However, if choosing to work with an alternative lender there is limited paperwork, simple application, and fast approvals and funding process compared to a traditional lender.

Bottom Line

If you are determined to make your bar successful and just need the capital to make it happen or need quick restaurant funding, a loan can help you. While getting small business loans for restaurants can be challenging, there are several routes you can take to secure a loan for a bar in 2023.

To learn more about obtaining a loan from a bar, you can speak with an experienced Business Financing Advisor today at ROK Financial to learn more about your options.

The post How to Get a Loan for a Bar in 2023 appeared first on ROK Financial.

Whatever the case may be, looking into restaurant business loans and having a plan in place is always a good idea. Below, we will cover tips for people wondering how to qualify for a restaurant loan, and we will discuss various financing options to help you better decide what is best for your business.

4 Tips To Help You Qualify

If your restaurant business is struggling, it can be challenging to qualify for a restaurant loan. Each business situation is different, and each loan has its own requirements. Below are four tips to help you get started if you are wondering how to qualify for a restaurant loan when business is slow.

1. Check Your History

You will need to provide a complete history of your operating practices and your finances for your restaurant. Having adequate experience and documented revenue, spending, etc., will increase your likelihood of receiving a loan.

2. Work on Your Credit

Having a good personal credit score and business credit score will enhance your likelihood of getting any loan you might apply for. Work on your credit score to ensure it is high enough to qualify for the loan you need. However, there are options available for those that have less than stellar credit.

3. Have a Business Plan

Before you apply for a loan, you need to have a business plan that shows the lender how you plan to be successful and how you plan to repay it.  Business plans are required when applying for business loans through a traditional bank. Most alternative lenders do not require a business plan to obtain financing.

4. Make Sure You Apply for the Correct Loans for Your Business

Do not apply for a loan that is not right for your needs. Once you take out a loan, it may affect your credit and influence if you can get loans in the future. Be wise with your loans now and only take out what you need.

How To Get Financing For Your Restaurant

The first step to financing is deciding what you need, how much you need, how long you want your loan to be, and what you need to use it for. Once you have determined whether or not you might qualify for a loan, you need to apply. You can either submit an online application or chat with a Business Financing Advisor at ROK Financial.

You will need to provide information about your restaurant, including proof of your operating history, revenue and profits, business credit, personal credit, and assets you have as collateral.

Once you have provided documentation and have confirmed your legitimacy, you will either be approved or denied for the loan.

The Types of Financing You May Qualify For

There are many different types of restaurant loans available for businesses. You will want to thoroughly consider all of your options to decide which one is best for your business. Below are some possible loans to consider.

1. Working Capital Loans

These loans are the best overall financing option for most restaurant owners. They are short-term loans that can be used towards any of your expenses and operating costs. The maximum amount is usually $250,000, so they are best for restaurants looking for a fast loan that is relatively small.

2. Lines of Credit

Another financing option for restaurateurs is opening a line of credit. It is flexible and offers you access to funding whenever you need it.  You can use it for any type of expense. Additionally, you only pay interest on the credit that you use rather than on a full loan amount.

3. Small Business Administration Loans for Restaurants

SBA’s are small business loans for restaurants that typically are $50,000 or less. An SBA loan is ideal for a business just starting that has small capital requirements. SBA loan applications often require a lot to qualify for and may take months to receive your funding.

4. Financing for Inventory

Inventory financing comes in many different available options and can be used to cover your company’s food costs. It comes in a line of credit, a short-term loan, or a medium-term load. You are limited to purchasing only inventory with this type of loan, but as long as you follow the rules, you can use it how you please.

5. Financing for Equipment

Similar to Inventory financing is equipment financing. This is perfect for people, remodeling a location, upgrading their current equipment, or replacing equipment. Equipment loans provide you with the capital you need to upgrade your kitchen equipment. You can finance the total cost of your new equipment, and the equipment itself is used as collateral, so your assets are not at risk. There also may be tax benefits when using equipment financing (consult with your accountant).

Getting Financing When You Have Bad Credit

Qualifying for restaurant business loans with bad credit is possible. The trick is to know where to ask. Banks have to adhere to strict guidelines to lessen risk and protect their customers’ money. With a bad credit score, a bank likely will not lend to you.

If a bank denies you a loan, look to a marketplace business funder or an online business lender to find alternatives. Some of the best loan options for restaurant owners with low credit scores are business cash advances, short-term business loans, merchant cash advances, and business lines of credit. They usually require a minimum credit score of 500, which is poor.

If your looking to obtain financing for your restaurant, you can apply directly with ROK Financial to discuss your options with a Business Financing Advisor.

The post 4 Tips To Qualify For a Restaurant Loan When Business is Slow appeared first on ROK Financial.

The Challenges Bars & Restaurants Are Facing

Despite the CARES act and other state measures to help provide emergency funding, the National Restaurant Association estimated that COVID-19 would put 110,000 restaurants out of business. That amounts to almost 17 percent of the industry.

It has also drastically affected the national unemployment rate. Restaurant closures nationwide have put 2.1 million people out of work, according to official numbers; however, there is widespread speculation that this estimation is only a fraction of the real number. For these reasons, there have been several attempts to provide financial relief for businesses in the food industry.

COVID-19 Funding Resources for Bars and Restaurants

The initial CARES Act rolled out last year but unfortunately did not provide the relief that lawmakers hoped it would. Now another restaurant relief bill, the RESTAURANTS Act, has struggled to pass in the Senate despite initial success in the House.

Meanwhile, the Federal Government also introduced the Paycheck Protection Program in 2020. This plan helped fund small businesses, including bars and restaurants, with some limited success.

The RESTAURANTS Act promises to provide $120 billion to restaurants around the country. The first businesses in line for relief would be those with less than $1.5 million in yearly revenue. It would also prioritize female-, minority-, and veteran-owned companies.

Since national financing has been too slow for a lot of business owners, other regional resources have surfaced for bars and restaurants around the country. Some of these are intended for restaurant workers, while others are for restaurants owned by people of color. Others are available to any restaurant or bar owner who applies.

Some examples of restaurant financing companies providing aid during the pandemic include:

• The Food and Beverage Industry Relief Fund for Black and Indigenous Americans
• Facebook’s Small Business Grant Program
• The Restaurant Workers’ Community Foundation’s COVID-19 Emergency Relief Fund

Additionally, restaurant and bar owners may qualify for tax deductions under the Employee Retention Tax Credit, which they can claim through their payroll taxes.

What Business Owners Are Using Stimulus Funds For

Business owners have to allocate their stimulus funds carefully to keep their company afloat. Some prioritize payroll to ensure that their employees receive everything they earn, especially if their employer owes them back pay.

Other business owners are using their stimulus payments to catch up on their rent. Like anyone else, they need to pay for the space they occupy. They can only fall behind so far before losing their license and their right to continue conducting business on the property.

Lastly, some business owners are using the stimulus funds to buy restaurant equipment. This ensures that they can still keep their business running even under COVID-19 guidelines.

Restaurants Are Hopeful For Loan Forgiveness

The Paycheck Protection Program, introduced in 2020, was intended to provide restaurant relief and recovery. It offered small business loans for restaurants as well as businesses in various other industries.

Restaurants and bars that were eligible received loans, but the terms of the loan were complex. Specifically, they mandated that restaurants use the money they received within eight weeks to qualify for loan forgiveness. This meant that restaurants spent the funds quickly, some still under lockdown.

In June 2020, Congress altered the original terms of the bill. Restaurants now had 24 weeks to use the funds. Sadly, it was too late for some businesses, many of which opted to continue paying their employees even while closed under state or federal mandates.

Now, many restaurant owners are depending on qualifying for loan forgiveness in the future. Others are looking for the best banks for restaurant loans in a last-ditch attempt to find a way to keep their business afloat.

What Does The Forecast Look Like For Bars And Restaurants?

It is difficult to predict what the future will look like for bars and restaurants. The COVID-19 pandemic is unprecedented, and scientists, politicians, and economists can only speculate what will occur. There are, however, some guesses at what the next few years will look like for the restaurant industry.

It is already evident that the future will hold some changes. More than 70,000 bars and restaurants have shut down under the weight of the pandemic. Many others have radically altered their operations, prioritizing curbside pickup and delivery over dine-in options.

Experts predict that many restaurants will have to implement new menus. This is because the pandemic has radically affected the national food chain, making it a challenge for restaurants to source ingredients as they usually would.

There is also likely to be continuing emphasis on health and safety measures. Customers are also expected to continue to demand takeout and pickup options and outdoor dining.

Recovering From The Pandemic

Pandemic recovery will be a long road for bars and restaurants around the country. But there are a few helpful tips that business owners may want to consider moving forward.

First, consider applying for an SBA Disaster Loan. This plan incorporates PPP loan and other loans for restaurants COVID but is also appropriate for disasters of different kinds. These restaurant loan rates are low. An SBA loan intended to protect your business in the event of a large scale disaster or crisis. It may take a while to receive funding, but it is still a worthwhile investment. In the interim many restaurant owners are applying for small business loans to keep them afloat during these difficult times.

Many bars and restaurant owners are also reflecting on whether they can genuinely survive a recession. This is an important thing to ask oneself. Remember that the follow-up of the COVID-19 pandemic will probably last for many years to come, especially in its effects on the economy. For this reason, restaurant owners should be as prepared as possible to weather the storm and, with any luck, come out the other side unscathed.

The post Bars & Restaurants Are in Desperate Need For Financing, But What For? appeared first on ROK Financial.

Here’s more information on what you should know about how to get a business loan for a restaurant.

What Types Of Business Loans Can I Get For My Restaurant?

There are four main types of business loans available for new and existing restaurants and their business needs.

Small Business Loans can provide you with same-day funding. These loans typically grant a minimum of $10,000 and a maximum of $5,000,000. Both offer flexible repayment plans, with as much as a ten year repayment term.

You may be wondering, how hard is it to get a small business loan for a new restaurant? If you’re trying to open a restaurant, chances are you have done the majority of the work needed to prove you are a good candidate for a Small Business Loan.

A solid business plan is key when demonstrating that you are a good candidate for a Small Business Loan. When making a business plan for your restaurant in hopes of learning what loan opportunities are available to you, keep in mind that outlining a clear and long-term strategy can affect your maximum loan size and your repayment terms.

Startup Funding are intended for new businesses, which means companies that have been in business for six months or less. First starting your business is when you need the most cash upfront but have the least access to typical business loans.

A Business Line of Credit is a revolving loan where you are able to take out the funds that you need when you need it and repay it afterward. Rather than one lump sum at one time, you are able to access these funds when needed. A Business Line of Credit is useful for restaurant setups because they can smooth over day-today cash flow fluctuations.

Equipment Financing is a useful but specifical loan option. Unlike your other three business loan options, which can typically be applied to nearly anything you may need for your business. Equipment Financing is used exclusively for equipment needed for your restaurant, such as ovens and specialized cooking or baking equipment.

Benefits Of Financing Restaurant Equipment

Restaurant equipment can be very expensive. When buying equipment for your restaurant you want something high quality that will last your business a long time, although this equipment comes with a high upfront cost. Obtaining a Small Business Loan for your restaurant makes it much easier to purchase the equipment needed to give your business its best chance at success.

Sometimes the equipment needed for your restaurant is a little out of the ordinary. This may make you question if you are still able to receive a business loan for the unusual equipment needed, in most cases the answer is yes! Before approving the funds, they may need to check the equipment just to be sure it qualifies for a small business loan. Oftentimes, this equipment usually does get financed, so try not to worry. With this type of loan, the equipment you purchase will become collateral. If you don’t make your payments on time, the equipment will be seized.

One benefit of financing your equipment is the ability to use your funds for other things your business may need, such as hiring staff, purchasing other supplies, or advertising your business.

How Can I Apply?

You can get started with our quick 15 Second Application. We will connect you to your very own personal Business Loan Advisor, who will help you assess all of your options and find the best option for your business. Your Business Loan Advisor can also help you address topics like opening a restaurant with a Small Business Loan or even finding an investor opportunity.

The post Is it Difficult to Get a Business Loan for a Restaurant? appeared first on ROK Financial.

If you run a restaurant, you more than likely have been looking for ways to improve your restaurant’s finances. There are a few different ways to find support for your business, and in this article, we will be discussing Small Business Administration loans or an SBA loan for restaurant owners.

How Can an SBA Loan Help Your Restaurant

An SBA loan for your restaurant can support your business endeavor in many different ways, which can ultimately help increase your profits.

One of the most commonly sought-after small business loans is the SBA 7(a) loan, which can provide valuable financial backup for essential needs. The SBA 7(a) loan is a good option if you have not had luck securing other means of financial assistance.

Buy Your Restaurant

A startup loan can help if you are still in the beginning stages of setting up your business. One of the biggest roadblocks for aspiring restaurant owners is getting the money to buy a building or even a food truck.

You will need a designated space to cook the food and serve it. With an SBA loan, you can get the backup needed to obtain this space, including purchasing real estate. Furthermore, a loan can help you buy a building for your restaurant and finance the land on which the building sits.

Purchase Equipment

Once you’ve purchased or rented space, you will also need to buy the many pieces of equipment necessary to keep a restaurant running, and it doesn’t come cheap. A loan can help increase the range of restaurant equipment, and quality, available to you.

Equipment Financing for Restaurants

Equipment financing for restaurants is often a necessity. A restaurant can’t function without the proper equipment, and having access to the right equipment can make or break a restaurant, especially within the first year.

The SBA 7(a) loan covers restaurants’ financing, and it will cover certain staples you need to stay open. Restaurant equipment financing can cover POS systems, ovens, fryers, shelves, office equipment, and more.

What This Means for Your Business

SBA loan qualification will make a big difference in achieving the necessary restaurant funding to get your eatery started. It can also take some of the weight off your shoulders, so you can focus on creating something special.

Large expenses, such as real estate and equipment purchases, will be less of a worry once you have been able to secure financing. However, the challenges don’t end here, as there will still be a lot of investing and personal funds needed to keep the restaurant running smoothly.

Overall, however, securing loans to buy your restaurant and fund equipment purchases can ease your journey into small business ownership. It can take time to turn a profit, particularly when you have loan payments, but many startup loan options for restaurants have flexible terms and low rates.

Of course, there are limitations to what you can use the funds for, and the amount you can borrow depends on a handful of factors.

How Can I Qualify?

Like any government loan, there are certain conditions in which a business owner will not qualify for an SBA loan. Even if you meet the qualifications and do not have bad credit, or former business startup loans, there is no guaranteed loan approval. Unfortunately, the myth of “guaranteed” loans is just that; there are many qualification metrics and minimum standards for SBA loans.

Owners who are applying for an SBA loan will need to meet these standards to qualify for a loan:

• The business must be working for profit. These loans are not available for non-profit organizations.
• The owner of the business cannot be on any form of parole.
• The business must be run and make a profit in the US or the US territories.
• If you have been able to secure other forms of financial assistance for your restaurant, you must first use those resources.
• The business owner must have invested, either with money or with property, equity into the business.

If you have met all of the above qualifications, you will likely qualify for an SBA loan. Keep in mind that the SBA itself is not the business lending you money. SBA loans are available through banks, credit unions, or other institutions centered around lending money.

And of course, with any loan, you will deal with terms and conditions. These terms specify how much money you will be receiving and for how long. It is important to hold on to and remember all the information about your business loans collected during the process.

What Are My Options?

The SBA 7(a) loan is an example of one of many SBA restaurant loans. Depending on the restaurant and business you are running, you may find that other restaurant loan options suit your funding needs better. Before sorting through all of your options, it would be wise to speak with a Business Financing Advisor. You can speak to an advisor today for free by completing ROK’s 15 second online application!

Finding an investor for a restaurant can play an important role in how the restaurant succeeds. Personal networking is a good place to start, but some banks may be willing to work with you on finding support. Research and looking at how to find investors for a restaurant can also give you a good idea of how much money you will need to start your business.

There are also the SBA Express Loan, the SBA 504 Loan, the SBA CAPLines, and the SBA Veterans Advantage Loan. These loans are viable options depending on the needs of the restaurant. They are each catered to specific demands that may come up depending on the business you are running.

We recommend surveying your restaurant’s business and identifying what you need finance-wise. It is a good idea to have a strong understanding of what your business needs to run based on your restaurant’s location and size. Obtaining an SBA loan for restaurant owners may not be simple, but it’s an excellent step toward your future as a small business owner.

The post Restaurant Owners Guide to SBA Loans and How they Work appeared first on ROK Financial.

You probably have a few questions, like: how does a merchant cash advance work? And, can I qualify for a merchant cash advance with bad credit?

A merchant cash advance may be the ideal solution to your small business cash flow needs, but it’s not always the most appropriate option. Let’s explore how merchant cash advance loans work so you can decide if it’s right for your small business.

What is a Merchant Cash Advance?

Let’s start by answering the most basic question: what is a merchant cash advance?

A merchant cash advance (MCA) is when a financing company provides money upfront in exchange for a portion of the business’s future sales. It’s not a loan, it’s a cash advance, which has its own benefits and caveats attached.

Business owners use merchant cash advances in industries where credit and debit card sales are the primary forms of transactions. Restaurants, retail shops, repair shops, and so forth easily fall into this category.

For an MCA, the provider will typically look at daily credit card sales receipts for the business. Based on the number of sales, the provider will determine how much cash they can provide. The receipts also help providers calculate how quickly a business will pay back the advance.

A percentage of every credit or debit card sale is directly transferred to the provider to pay back the advance. So, for a cash-short business, MCAs provide fast money that’s only due as the business accumulates sales. For many business owners, that’s an ideal trade.

How Does it Help Your Business?

Now that we know what a merchant cash advance is, let’s look at a few ways it can help your business.

Quick Money

As mentioned, an MCA provides money quickly, sometimes in as little as a few hours. For a small business owner, that can be a huge benefit.

Maybe there’s a short term opportunity you want to take advantage of, or perhaps you need a little help getting through a slow period. Either way, a merchant cash advance may be a good idea.

Repayment as a Percentage of Sales

Another plus to merchant cash advances is the repayment method. Since a business pays back MCAs using a fixed percentage of sales, repayment automatically adjusts based on how your business is doing.

If there aren’t any sales on a given day, you don’t pay anything to the MCA provider. Alternatively, if your sales are high, you end up repaying the advance that much faster.

Forgo Traditional Loan Requirements

Merchant cash advances also forgo typical loan requirements. Because you’re not working with a bank, you don’t have to provide collateral. And you don’t have to have good credit.

That said, you may need to provide a personal guarantee. That’s a signed document which makes you accountable should you fail to pay back the MCA.

What Type of Business Can Benefit?

Like we said, any business that relies on credit or debit card sales can use a merchant cash advance. Restaurants, auto repair shops, contractors, retail shops, and many other small businesses can benefit from them.

In general, if a small business needs cash to take advantage of an opportunity or issue, an MCA is a good option. Maybe inventory is available at a discounted rate, and you want to purchase it in bulk. Or, maybe your store’s heating system went down, and you need to repair it fast.

A merchant cash advance for startups is a possibility as well. If a startup business cannot secure traditional financing, sometimes a merchant cash advance is an option.

Typically MCA providers want to see that your business has been successful for at least three months, which disqualifies many new businesses.

If you own a business and have bad credit, a merchant cash advance might be your best bet for quick cash flow solutions because a good credit score isn’t required.

The provider may still pull your credit score during the application process. However, unlike traditional financing options, a poor score will not negate your chance of receiving a merchant cash advance.

Can I Qualify?

If your business relies heavily on credit and debit card sales, you likely qualify for a merchant cash advance. That’s true even if you have poor credit or wouldn’t qualify for a traditional loan.

You’ll need to fill out a quick application that asks for basic information like how many years you’ve been in business. The provider will also ask for annual or monthly sales numbers.

At ROK Financial, there’s no minimum FICO credit score required for a merchant cash advance. As long as you’ve been in business for at least three months with $15k in monthly sales, you’ll likely qualify for a top-financing option.

Knowing Your Options

Merchant cash advances are a great way to fix cash flow issues, but they’re not your only course of action. Other financing options may be a better fit given your situation.

• Small Business Loans are available to any business that needs to stabilize its operations. They come from banks as well as other lending companies and have traditional terms. Your sales don’t need to come from credit or debit cards.

• Startup Funding works well if you’re starting a business from scratch. Good credit is required, but you don’t need to show time in business or monthly sales records.

• Business Lines of Credit exist so that businesses can scale-up as they grow. The lender won’t provide funds as a lump sum but instead makes them available as needed.

Frequently Asked Questions

At this point, you may have a few questions about the ins and outs of merchant cash advances. Let’s see if we can answer them.

What Happens if I Default on an MCA?

When someone gives you a cash advance, it’s always best practice to pay it back. Given that MCA’s are paid back automatically as sales come in, this shouldn’t be a problem.

But, of course, sometimes it is an issue and what happens next depends on various factors. If your business closes, you’re not responsible for paying back the MCA. However, should you ever reopen the business, you retain responsibility for paying back the advance.

More so, if there’s any indication of fraud, the MCA provider can pursue legal channels to recoup their investment.

Will a Merchant Cash Advance Hurt My Credit Score?

Taking out a merchant cash advance has no direct impact on credit scores. Securing one does not hurt your credit score, and paying it off does not help your credit, either.

Do You Pay Interest on a Merchant Cash Advance?

It’s technically not interest; it’s a factor rate or fee. With an MCA, traditional lending terms don’t apply, but the concept is similar.

Factor fees usually vary but will be based on the provider’s evaluation of your business.

Merchant cash advance business loans are one way to secure fast cash for your business, even if you have bad credit. Talk to a ROK Financial advisor today and learn if it’s the right option for your business in a matter of minutes.

The post How Does a Merchant Cash Advance Work: The Complete Guide appeared first on ROK Financial.