As an aspiring restaurateur, you’ll need access to capital to get your foodservice business up and running. This is especially important as many different overhead costs are necessary for making a restaurant business successful. Underestimating these fixed costs can make your restaurant business susceptible to bringing in a negative cash flow. It’ll be helpful to secure finances as soon as you can to open your doors. This article explores three ways to get the money you need for your new restaurant fast.
1. Tap into personal finances.
Many small business owners use their savings to start their businesses. You may decide to use all or a portion of your savings to fund your new restaurant. Nowadays, many aspiring entrepreneurs tap into non-savings areas of their finances to get the much-needed capital for the business venture. For example, some new business owners use their immediate fixed annuity to finance new ventures. An immediate annuity is also known as a single premium immediate annuity (SPIA) or income annuity. Annuity products are insurance products that can provide a fixed income stream for the rest of your life.
So in other words, an immediate annuity is a type of pension plan or retirement income alternative, and you can elect to start receiving regular income from your annuity. The annuity provider agrees to make income payments for the term of the contract but will first determine the duration of the payout phase based on several factors, including the financial strength of the insurance company.
The best annuity is tailored to suit your needs, and the insurance company guarantees that the investment account earns a specified rate of return. This type of annuity guarantees income payments that start between a month and one year after the time of purchase. Annuity purchases can’t be undone once the annuity provider issues the immediate annuity contract.
2. Look into a restaurant business loan.
A restaurant business loan is a type of loan used to cover short-term operating expenses, including inventory, salaries, marketing, and maintenance. A working capital loan is vital for ensuring your business runs smoothly and stays afloat. Starting a restaurant from scratch has many fixed costs. You’ll need to purchase equipment to facilitate the smooth operation of the restaurant. So, consider taking out a restaurant equipment loan to finance the purchase of essential equipment. This is a viable alternative to leasing restaurant equipment from a leading company.
Equipment finance is somewhat similar to restaurant equipment leasing. You’ll be required to make affordable monthly payments to repay the loan. Nine times out of 10, the revenue generated from using the equipment purchase outweighs lease payments. QuickSpark is reputed for providing restaurant equipment financing for lower monthly payments at competitive rates. This financing solution seems like the best way to go for someone in your financial situation. In short, equipment loans allow you to preserve working capital and a stellar credit score.
3. Consider an SBA loan.
The Small Business Administration (SBA) is an agency of the U.S. government that facilitates small business loan options. SBA aims to encourage budding entrepreneurs to start and grow their businesses, and their loans are the most visible service the agency provides. Contrary to popular belief, SBA doesn’t offer direct business loans or grants. Instead, the agency guarantees against business loans extended by credit unions, banks, and other official lenders.
SBA-guaranteed loans are backed up to 80 percent by the Small Business Administration. This invariably reduces the lender’s risk and gives a borrower access to loan facilities that were otherwise unavailable at specified terms. Consider taking out an SBA-guaranteed loan to get the money you need for your new restaurant. Besides, this loan can come in handy in financing equipment purchases, a real estate purchase, leasehold improvements, and working capital. Best of all, SBA regulates the interest rate charged by the lender.