Open post

Bad Credit Loans: Restaurant Loans 101

Over the past 5 years, the amount of franchise establishments in business have been steadily increasing with the demand for funding growing right along with it. Check out the chart from Statista! I’m telling you the truth! Franchises are seeing steady growth from year to year and the trend has been increasing upward without any evidence of slowing down. Small business owners nationwide are securing financing products from AMP Advance because we cater to individuals looking for bad credit loans ranging from restaurant loans, to equipment loans, and even unsecured business loans. If you are in the market for bad credit loans and find yourself in need of restaurant loans keep reading to learn more about what you need to know to make a confident decision.

To view all of AMP Advance’s Small Business Financing Options click HERE

Restaurant loans – Good and Bad Credit Loans

If you are one of many Americans looking for financing for your restaurant, know you are definitely not on your own. If you understand your needs, set realistic goals, and understand that without working capital business will not improve then you are in the right place. We understand that you do not have multiples of hundreds of thousands of dollars sitting in your bank account, funds to continue properly operating will be necessary at one point or another. If you are a small business owner working in the restaurant industry there are a few custom options available to you. Restaurant financing and restaurant loans are two financing products that are easily and readily available to you. Our goal is for you to have $100,000+ weekends, isn’t that your goal?

Small business owners who feel that they can start a new brand and make it on their own, beware. It is a lot easier said than done and if you are new to opening restaurants then franchise options, like Mellow Mushroom, are your best option. Franchising is a great option because the algorithm for success is quite literally spelled out for you. Franchising allows individuals to own their own small business without rewriting the wheel. Franchise owners receive a national marketing strategy, instructions for operations, as well as tried and tested scheduling and routines which have been deemed necessary for the overall success of the business. If the franchise rules are followed, and all aspects of quality management are upheld then it is very easy to reach complete success.On the other hand, some individuals have goals and dreams about creating a restaurant business from scratch. The requirements for properly and effectively running a restaurant are quite intensive. From keeping inventory every week to properly running marketing campaigns, every restaurant small business owner has to cover the basics and beyond in order to continue success. Restaurant management savvy individuals are familiar with the fact that a large majority of new restaurants close within one year but not many individuals know why. 

 

In order to stay afloat when opening a business all bases need to be met and up kept in order to be successful. At no time, whatsoever, should a new restaurant open it’s doors without at least 6 months of marketing under its belt. Let’s be real, it does not matter how good or revolutionary your food is. It does not matter how beautiful your brand new restaurant is. Nothing matters if the community and the masses do not know or have not heard about the new brand. New restaurant owners trying to make 

a name for themselves must understand that the key to success in the restaurant world is consistent traffic. At the end of the day, if you have the capital accessible, we always strongly recommend franchising. We always recommend franchising because this business venture’s risk involved is substantially less than if an individual decided to create their own brand. Instructions as well as an aged national marketing strategy are no longer of worry to the business owner relieving some of the day to day stresses the job comes with.

Restaurants eat cash. Operating a restaurant, franchise or not, requires a substantial amount of cash on hand in order to make sales day in and day out. As a small business owner running a restaurant the very last thing you want to have to worry about is making payroll or being able to properly fill your inventory. In these instances, small business owners turn to restaurant financing to solve cash gap issues.

There are 4 different restaurant financing options ranging from prime products for businesses with good credit to individuals seeking bad credit loans.

 

Equipment Loans

Equipment financing is when a small business owner receives a loan for the purchase of equipment necessary for day to day operations of their business. These loans are provided to prospective clients who have sufficient personal and business credit profiles, and sufficient use for the equipment. If you are going to utilize equipment financing make sure that the ROI pays off the initial investment in a relatively quick time period so that you may experience long term profits and decrease your overall holdback percentage. 

Working Capital Loans

When discussing working capital loans two products fit the role, unsecured business loans and merchant cash advances. A merchant cash advance, or in short MCA, is not classified as a loan. A merchant cash advance is an advance of cash in return for the purchase of future receivables. The advance amount and details are subject to the ebb and flow of revenues and its not a loan due to the fact that merchant cash advances do not have a fixed term, payment amounts are based on the overall holdback percentage of any given business. Merchant cash advances are targeted for those small business owners who do not qualify for traditional loans and are looking for credit rehabilitation to get back into the top tier of loan programs. An unsecured business loan is a financing option in which zero collateral is requested. This form of business loan is qualified solely dependant on past credit history of the borrower. In today’s day and age, finding a true unsecured business loan is few and far between, especially for larger funding amounts. Banks are reducing the amount of loans they are lending to small businesses more than ever. Most business owners’ first choice when thinking about loans are institutionalized, traditional banking sources. While these sources may offer an unsecured business loan or unsecured business line of credit to top qualifying borrowers, most of these traditional bank sources typically require collateral or some other form of guarantee.

Inventory Financing

One of the largest challenges and stresses for restaurant owners is covering food costs along with managing food costs on a consistent basis. Like previously stated, restaurants eat cash. Restaurant owners must have capital available in order to cover one of the largest restaurant expenses, inventory. Restaurant financing and restaurant loans come in all different  forms, including but not limited to, short-term loans, medium-termed loans, or inventory specific lines of credit. All of these forms of financing to cover inventory allow small business owners make smart, confident decisions when it comes to managing inventory and making it through every day of the week. With each form of inventory financing solution there are no catches. Purchase your inventory, make your payments, keep the ROI.

Lines of Credit

A business line of credit are a financial product that is offered to small business owners nationwide because of the peace of mind that it brings. A product used by the financially responsible, small business lines of credit are certainly helpful when unexpected expenses arise. Businesses qualifying  with AMP Advance for a business line of credit are able to get through all sales valleys due to the convenience of the credit line they hold in their back pockets. The revolving credit program does not have a fixed payment structure and the interest charged is dependant on the state of the market.

The Lowdown

As you can see, restaurant owners finding themselves crunched for cash have many different financing options available to them.

Due to restaurant’s rather high ROI and large profit margins, receiving financing makes great business sense. New small business owners need to make sure all of their bases are covered before even entertaining the idea of opening their doors. If you have been fiscally responsible and are interested in opening a restaurant we definitely suggest checking franchising opportunities to reduce the risk of potentially not succeeding. Not only are you guaranteed exposure at the national level, but you are also provided with, figuratively and literally, the key to success. From full instructions spelling out operations, to suppliers already set up, franchising provides security in an extremely unsecure industry.

AMP Advance is a Miami based industry leading direct funding source out of Coconut Grove, Florida. We help those who are in need of small business financing by providing web based financing options & funding solutions. Our solutions assist small business owners find matching opportunities while assisting small business owners improve their overall financial situations. AMP Advance provides small business loans, business lines of credit, accounts receivable financing, equipment financing, unsecured business loans, and revenue based loans to millions of small business owners nationwide.

Open post

An Unsecured Business Loan For All Businesses

Every small business owner gets into a situation where borrowing money is the only way to keep pushing forward. The choices to borrow now in the 21st century are endless, from borrowing from family to securing a business credit card, or even more traditional means like an SBA loan all come into question. When traditional lending means is inquired upon two specific products come into question: a secured business loan and an unsecured business loan. These 2 types of loans each have their own requirements, fit specific businesses, and bring along their own separate advantages and disadvantages.

To view all of AMP Advance’s Small Business Financing Options click HERE

 

Unsecured Business Loan

When looking at different financing options it is of utmost importance to know the difference between all of your available financing products. Look closely at all of the options and pick the one that fits your needs. Below we explain everything you need to know about an unsecured business loan and a secured business loan. As mentioned previous times before, make sure you do your own research before allowing someone else being in your ear providing you with their opinions.

An unsecured business loan is a financing option in which zero collateral is requested. This form of business loan is qualified solely dependant on past credit history of the borrower. In today’s day and age, finding a true unsecured business loan is few and far between, especially for larger funding amounts. Banks are reducing the amount of loans they are lending to small businesses more than ever. Most business owners’ first choice when thinking about loans are institutionalized, traditional banking sources. While these sources may offer an unsecured business loan or unsecured business line of credit to top qualifying borrowers, most of these traditional bank sources typically require collateral or some other form of guarantee.

The Difference: Specific Collateral vs A Lien on Business Assets

Traditional lending sources generally use collateral to secure themselves with lending funds to any business. Traditional lenders will look at assets that you own either real estate, business equipment, or other tangible business assets that carry strong value. The lender will proceed to assess the property or equipment in order to determine the loan-to-value ratio of the asset in order to finalize pricing. Typically, we are seeing lenders borrow against seventy percent of assessed value on real estate properties and sixty to eighty percent of ready-to-go inventory. Each different lender that you speak to has their own algorithm determining the loan-to-value ratio. Ask whichever potential lender how the value is set so that you may provide yourself with the best chance of securing your capital.

Alternative lenders, like many online lenders you see today, do not require collateral, in most cases, but rather execute a business lien on business assets along with a personal guarantee in order to secure the loan that you are seeking. This allows small business owners to qualify for more types of financing products because without a typical form of collateral, the lender is being secured through the lien. Loans that do not require collateral, but require a lien tend to cost slightly largely due to the higher assessed risk involved. With this in mind, here are some benefits to unsecured small business loans that you should keep in consideration:

  • Online lenders are changing the alternative lending space and fixing all of the problems most small businesses face when it comes to lending. The speed to funding now is next to none when applying for a traditional form of loan can take 30 to 60 days. With online alternative lenders, quick application processes, and even quicker approval times have become the new standard. Once small business owners are approved for their unsecured small business loan funds are deposited into the business banking account within 48 hours. Nowhere else will you find quick, efficient capital online!
  • Total loan amount is not determined by the value of your collateral! Different to loans from bank sources, unsecured business loans are qualified dependant upon the health of your business credit profile, cashflow observed when underwritten, as well as time of length in business and other determining factors. In many cases, small business owners qualify for a larger amount of capital than they normally would with a collateralized option.

Make sure you ask your lending source if they report your payments to the crediting bureaus. This can work in your favor over the term length of the loan, if you make payments on time these payments will help bolster your credit score. Along with this, if payments are reported, this also shows that you have an increased credit amount and all lenders feel secure if proper credit history is observed. All and all, unsecured lending options are not required to have collateral securing them and this alone has many people thinking of new age ways of lending that is emerging for small business owners nationwide.

Unsecured Business Loan or Secured Business Loan?

Have you secured yourself a business line of credit, or a business credit card? If you have already secured or tried to secure one of these options, the next option may be securing an unsecured business loan. Financing option details all vary from lender to lender but you can expect to see different debt structures, different payback schedules, and different forms of qualifying. Before getting too far ahead, if you are a small business owner you need to initially determine which is right for you, an unsecured business loan or a secured business loan.

Secured Business Loan

Secured business loans, or asset backed loans, are collateralized being secured by tangible, business assets. These assets range and vary from commercial properties, to buildings, to equipment. If default occurs (default- failing to pay back on financing) the small business owner loses the asset that was put up for the funds and the lender becomes the legal owner of the asset. Typical forms of collateral seen, but not limited to, future receivables, inventory, business equipment, personal equipment, business buildings and sometimes liens on your business.

Business owners choose this option to limit personal risk involved with the investment, business owners may seek lower interest rates or even the owner has not proven sufficient credit history with making repayments over longer term lengths. The pros and cons of secured business loans are bountiful. A large pro for secured business loans are banks are more lenient and gracious with the terms and rates because their investment is secured, or backed. Business owners requiring larger dollar amounts, usually because of buying real estate, have sometimes over 30 years to repay these loans. Since the assessed risk with secured loans are lower, there is more room for error (aka missed payments etc.). A large con presented with secured business loans is that they are limited to the value of their assessed asset put up for collateral. With secured business loans, the business owner is putting a possession up for legal repercussion and if you do not repay the loan you will lose the asset put up for collateral.

Unsecured Business Loan

In many instances small business owners do not feel comfortable with putting up business assets as collateral in order to receive a loan. Businesses in this case would have to rely on a strong aggregate credit score in order to secure the funds that they are seeking. In this instance an unsecured business loan is the option to proceed with. Unsecured business loans are not backed by collateral but do require other types of guarantee. This type of financing, due to being higher risk to the lender, comes at a slightly larger cost. In this situation, if default occurs, there are no assets to take in turn for payment. Unsecured business loans tend to have higher interest rates and the qualification process is generally less stringent. Banks can even require a different form of security instead of collateral – like to purchase your future sales receivables.

Unlike secured business loans, unsecured business loan does not have the restrictions of only receiving funds of equivalent value of your collateralized asset. Not only does this allow you to receive the most funds that your business deserves but this also cuts the time to funding in half. Upon bankruptcy on a secured business loan, you are not left helpless, forgiveness sometimes occurs. Cons of unsecured business loans include, but are not limited to, higher interest rates, shorter term lengths, increased qualification standards and having a heavy credit related aspect. The source lending the funds will require lengthy time in business, strong cash flow, and a sufficient aggregate credit profile. In the case of a default on an unsecured business loan, damaged credit plus a myriad of other negative proceedings will occur.

Secured Business Loan Incentives

A large incentive with secured business loans is that the interest paid on the principle amount can be written-off as tax deductible. With an unsecured business loan a small business owner cannot write off the interest paid on the principle lent amount for tax saving reasons.

When you have a secured loan, it is possible to write-off interest that is associated with the loan. This would be true if the loan is secured by your primary home. But you are then putting your home at risk if you can’t make payments on the loan. With an unsecured business loan, you cannot write off the interest because it is not collateralized. This prevents any of your assets from being at risk.

Continue to learn all that you can about your small business and finance needs. Figure out the proper source, your proper rate, term lengths and product types available to you so that you find exactly what fits your needs. Before applying we suggest doing everything you can to apply with a good credit score, doing your research, and knowing what is available on the market. This will allow you to secure the best financing option for your business.

 

AMP Advance is a Miami based industry leading direct funding source out of Coconut Grove, Florida. We help those who are in need of small business financing by providing web based financing options & funding solutions. Our solutions assist small business owners find matching opportunities while assisting small business owners improve their overall financial situations. AMP Advance provides small business loans, business lines of credit, accounts receivable financing, equipment financing, unsecured business loans, and revenue based loans to millions of small business owners nationwide.

Open post

Term Loan: All You Need to Know

As per Investopedia, “A term loan is a loan from a bank for a specific amount that has a specified repayment schedule and a fixed or floating interest rate.” Most term loan providers will extend loans with repayment terms from one year to ten years. Highest qualifying clients, through their own research, can also find hidden gem providers who can extend loans up to thirty years. Term loans tend to involve unfixed interest rates in which additional balance is added in order to satisfy repayment. 

To view all of AMP Advance’s Small Business Financing Options click HERE

 

Short Term Loan 

For many small business owners, a short term loan makes the most sense. Short term loans are relatively easy to secure, and you can receive your funds sometimes even within 24 hours. In today’s day and age, the plethora of alternative lending can be overwhelming to some business owners. Due to the abundance of alternative lending options available, it is ever so easy to get funds for your business without having to deal with the restrictive nature and requirements of traditional banking institutions. Small business owners are now easily securing the funds for their business without even having to step into a bank. There are many instances in which small to medium sized small businesses do not need long term loans or financing.  

On the alternative lending market, financing options like working capital loans, merchant cash advances, or equipment financing and leasing offer everything a small business owner may need. These options provide flexibility while offering very quick turnaround times so that business owners do not skip a beat in day to day business. This form of unsecured financing is expected to be repaid within a shorter length of time, generally six to eighteen months. A short-term loan has a quick approval process, do not require collateral, and require minimal financial documentation. Consideration of short term financing can range from needing fast cash for a repair to any other business venture in which small business owners cannot wait thirty days for their funds. Not only are small business loans good for emergencies but they are quick fixes to unsteady cash flow. Overall, short term loans are one of the easiest options for small businesses to obtain liquidity and break through any financial challenges faced. Long term loans, can be thought of as longer termed debt taken on.  

Businesses Benefiting Greatest from Short Term Loans

Small Business Owners Who Cannot Wait

As mentioned in a previous post, there are many instances where surprises spring up in day to day business. Maybe one of your suppliers is offering a discount this month, or you see a special foreclosure on Short or Long Term Loans, which are betterthe market and it is your dream space. Whatever the case may be, you need to take advantage of the opportunities in order to increase sales or take business to the next level. All is lined up but the only thing missing is the actual cash in the account. In this exact instance, a short term loan is the most obvious choice. Within 24 hours of applying, funds can be transferred which allows you to never leave money on the table. You are in the business to make money, not lose money. It always must be kept into consideration that with the swift ease of obtaining the needed capital, the cost for the funds is generally higher compared to longer term options. One question business owners must ask themselves when weighing out the pros and cons of term loans is will the return on the investment be worth it? Short term loan options are generally higher in overall cost due to being uncollateralized, completely unrestricted, and requiring much less financial documentation (And did I mention funded in 24 hours?). If the opportunity to make a significant return on the loan is present then the decision is a no-brainer.

Small Business Owners Seeking to Balance Cash Flow

In a recent study conducted by AMP Advance, seventy five percent of our customers stated that the largest Small Business Owners Seeking to Balance Cash Flowcause of their stress in day to day operations is cash flow. Many small business owners are going through the exact same things each year but in different industries. Steady cash flow is a constant struggle and it is what everyone is trying to conquer! Finding yourself desiring steady cash flow? That is easy, begin by doing research and find yourself a short term loan provider and secure a short term loan of up to $500,000 to even out the peaks and valleys in your revenue. Stop staying awake at night wondering how you’re going to make it through the week. Do not be like the seventy five percent, balance your cash flow with a short term loan today.

Business Owners Sensitive to Long Term Debt

Client’s who have this mindset come across my desk daily. Business Owners Sensitive to Long Term DebtI cannot knock it, it’s completely understandable. Nobody likes long term contracts and truth be told not many people know how it feels making a commitment for up to 30 years at one time. Short term financing provides a solution to those small business owners facing this dilemma. Payments observed on the loan generally tend to be a higher dollar amount due to having to fit the entire loan in a substantially shorter amount of time. Short term loan providers are flexible and some even offer early payoff discounts if you receive your return on your investment sooner than you had previously thought.

Business Owners Using Short Term Loans for Credit Repair

The quickness and ease of short term loan options can help provide businesses with a quick credit rehabilitation. Ask your loan provider if the installment payments are reported to the major credit Business Owners Using Short Term Loans for Credit Repairagencies. If each installment payment reports to the credit agencies, then based on your payment structure decided you are in for a great boost in credit score. Keep this in mind when determining your payment schedule. Most providers provide daily payments which seem like a complete burden. In reality, the absolute opposite. Not only do terms associated with daily payments cost the least in the long run, but they provide you with opportunities daily to increase your credit score. Using financing for your business doesn’t sound all that bad now does it? Who would’ve thought that just by simply making the scheduled installment payments, a noticeable credit improvement would occur!

Long Term Loan

Long- term loans not only have long term repayment structures but they also have just as long application processes. A long term loan generally includes funded amounts up to over five million dollars and repayment terms up to thirty years. This type of financing, with long term installment payments, is vital to certain industries and several different types of businesses. Compared to short term loans, in which up- front interest is higher, long term loans generally have next to zero upfront cost. With zero or close to zero upfront cost, long term loans are generally more expensive due to the fact that you accrue interest on them over time. If your set installment loan is for 30 years then you have to expect 30 years of accrued interest to the overall cost. Along with the increased overall cost, long term loans are more difficult to secure and the application process generally takes 30 business days. Long term loans are required to adhere to strict standards and qualification practices as well as a meticulous due diligence process. An alternative lender, like AMP Advance, provides bad credit loans as well as long term loans to assist small business owners who do not have adequate credit histories and whom traditional institutionalized sources would not provide the funds to.

Long Term Loan

Which Term Loan Option is The Best?

At the end of the day, whatever term loan option decided is best determined on your short and longer term needs. Weigh out all your options, and create short and long term goals. Do you need short term financing or can it wait? Do you want to make the commitment for twenty or more years? For some, long term financing options are vital to the long term integrity of  the business and security of your tangible assets. To most, short term loan options are their best option. Work with your lender, they can truly customize any type of loan, long or short, to your exact company’s needs setting you up for prosperous growth and success.

 

Which Term Loan Option is The Best?

AMP Advance is a Miami based industry leading direct funding source out of Coconut Grove, Florida. We help those who are in need of small business financing by providing web based financing options & funding solutions. Our solutions assist small business owners find matching opportunities while assisting small business owners improve their overall financial situations. AMP Advance provides small business loans, business lines of credit, accounts receivable financing, equipment financing, unsecured business loans, and revenue based loans to millions of small business owners nationwide.

Scroll to top