Using an SBA Loan for a Restaurant
It’s easy to forget that many restaurants qualify for financing from the Small Business Administration. As long as restaurants meet the employee range and other factors stipulated to be considered a small business by the SBA, you’re eligible to apply for an attractive SBA loan. Here are a few things you should know about using SBA loans to finance restaurant growth.
You Can Use the Money for Anything Your Restaurant Needs
SBA loans offer a lot of advantages for business owners, including greater flexibility than traditional term loans. While SBA loans aren’t exactly a blank check — you still have to demonstrate what the money will be used for — they do give you a lot of freedom for deciding how to grow your business. For example, you can use them to purchase new kitchen appliances, food prep surfaces, and equipment, furniture or front-of-house POS systems. In fact, you can even use them to finance interior renovations or dining room expansions.
It’s Important To Take Care of Your Restaurant’s Reputation
Qualifying for an SBA loan means showing lenders that you’re a serious entrepreneur. One part of this than some restaurateurs overlook is social media. What you say to your customers and followers on social media affects how banks view your business. If you’re always kind and respectful, it makes it easier for you to impress them. Humor is OK, of course, as long as it’s professional.
You Can Still Qualify With Less-Than-Perfect Credit
Don’t let a poor credit score discourage you from applying for an SBA loan. One of the purposes of the Small Business Administration is to help companies going through difficult times to thrive. SBA loans are often friendlier to owners with less-than-optimal credit ratings than traditional loans. You still have to fill out plenty of government documents about your business, but poor credit doesn’t disqualify you.
Be Careful When Looking for Partners
Ongoing debt can make it difficult to secure an SBA loan. As the primary owner, you take great care to avoid debts and keep operations running smoothly. However, part of protecting your restaurant’s reputation means asking for financial information from potential partners before accepting them. If one of them has debts in other businesses, it can complicate the SBA loan approval process.
When you work with knowledgeable experts to apply for an SBA loan for your restaurant, the results are phenomenal. SBA loans have some of the best interest rates around, with comfortable terms that minimize your monthly payments. Putting all that capital to work for your business has a great effect on profits.