Running a successful restaurant, café, or bistro requires a certain passion for bringing people together over a mouth-watering meal. Beyond that, however, it also takes money to make your culinary venture a success.
To keep the ovens on, many foodservice professionals turn to restaurant loans to meet their financing needs. Some popular options include merchant cash advances, inventory financing, equipment financing, Small Business Administration loans, and term loans.
Term loans, in particular, have several characteristics that make them attractive to restaurant owners:
What is a term loan? With this kind of loan, the lender provides you with a lump sum of cash that you repay over a set period of time. Offering lower interest rates than credit cards, they make investments in long-term business growth possible. Repayment can last as little as a year or extend over several years, based on the lender.
What are the benefits? You have some leeway when it comes to your repayment term: longer term for a larger payment and a shorter term for a smaller payment. Additionally, term loans generally offer much higher borrowing limits when compared to a personal loan or a business credit card. A term loan is perfect for making an investment in an opportunity that will create a steady stream of cash in the near future.
Are there any downsides to term loans? While term loans can be a solution for restaurant owners who need cash quickly, there are some potential downsides to consider. First and foremost, pay attention to the APR on your loan offer(s). The APR tells you what the loan actually costs each year, taking fees and service charges into consideration. While a loan may appear to have a low interest rate, a high APR gives away the underlying fees and the actual cost of the loan over time. Additionally, remember that using a term loan to cover a cash shortage when you don’t expect business growth in the near future, or using one to cover an expense you expect to repay in a few weeks, may drag down, rather than boost your business.
Once you have you've established your restaurant financing and gotten your business running, continue to manage your finances and accounting with Revel’s QuickBooks integration. You can easily track and report purchase orders and sales. Optimize your inventory with the QuickBooks integration and take actual inventory counts and update product inventory costs in real time.
Contributed by Bond Street.
Client Login