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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.

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Insider’s Guide to Equipment Financing and Leasing

An insider’s guide to equipment financing and leasing. Equipment financing and leasing is the process of acquiring business equipment by small business owners using funds that have been provided by a financial institution. But wait, what qualifies as business equipment? Business equipment, for the sake of equipment financing is any liquid and palpable asset, not including property (or building on property), utilized for the successful day to day operations of a small business.  

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

 

 

What types of equipment qualify for financing? 

Almost any type of equipment utilized for day to day business and operations can qualify for financing. Equipment varies from furniture necessary to fill an office to a walk-in freezer for kegs at a bar. Doctors finance many types of equipment and most of the x-ray machines, MRI machines, and CT scanners found in imaging centers have all been financed. Most small business owners cannot afford the necessary equipment to complete the job. Leasing opportunities are also available, but every small business owner’s dream is to own all their own necessary equipment.  

 

 

 

 

Why should I utilize equipment financing and leasing?

Many small business owners choose financing over buying their heavy equipment outright. Choosing equipment financing provides much more payment flexibility in the long run when purchasing equipment that can cost from $10,000 to $1,000,000 (oil rigs etc.). It is assumed that the asset being purchased will have a significant life of use, in which it provides a large yield in return, paying itself off in the process. 

Another reason for turning to equipment financing and leasing may be due to unfortunate circumstance. If a restaurant’s walk-in freezer or pizza ovens break, no matter what, these pieces of equipment are vital for day to day operations. Equipment financing can always be relied on and is recommended if you are in a qualifying industry.  

Equipment loans, just split into two.

There are two different financing opportunities correlated with equipment loans. 

As previously recommended, please do your own research before initiating any type of financial decision and gather all details on the market so that you can make responsible financial decisions. Here are the major details we feel you should know about the two different sides to equipment loans to provide a little help to you before you make this huge business decision. As per the U.S. Economic Outlook 2018 Equipment Leasing & Finance U.S. Economic Outlook, “Equipment and software investment growth is expected to strengthen in 2018 after expanding at a solid pace in 2017. A strong labor market, elevated business confidence levels, and healthy credit conditions should build on the economic momentum experienced in 2017, while tax cuts and a firming oil sector will likely offer additional boosts to growth. However, a rising interest rate environment could weaken lending activity as the year progresses. Overall, investment in most equipment verticals should remain solid in 2018.”

Equipment Financing

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.

holdback percentage: debt to income ratio

If you are in a situation where you already own other pieces of equipment, and the assessed value is sufficient, some lenders allow the use of collateral to finance the loan. If the value of the equipment you are purchasing is on the lower scale, and collateralization is not necessary, equipment loans have been observed to be offered in lower amounts than offered by most traditional banking institutions. This is what makes equipment financing an extremely vital tool for small business success.

Term lengths for equipment loans differ amongst the major providers of equipment financing and leasing. Equipment loan term structures generally stretch up to 7 years with the cost of the loan varying dependant on a multitude of different factors. Some factors include, but are not limited to, personal and business credit profiles, age of credit history, industry, use of funds, time in business, and state of incorporation.

We suggest, to all clients, to seek options from their local credit unions first. Become a member, apply and check out the amazing equipment loans they offer. Second suggestion, major banking institutions. All major bank institutions like Wells Fargo, Bank of America, and Chase all offer equipment financing and leasing options to qualifying small business owners. These sources provide the most generous terms but are much stricter in their qualifying procedures.

An online lending source, like AMP Advance, offers equipment financing and leasing opportunities to facilitate small business owners in increasing their monthly revenues. Our clients purchase the equipment that they feel is most necessary to increase sales while also saving themselves important capital through tax deductible write offs made for all payments on the loan. Unlike traditional financial institutions, AMP Advance provides responses within minutes and can have the funds in your account in as soon as 24 hours. AMP works as fast as you let them. All small business owners know that time is money and we’re not in the business to waste yours or ours- money that is.

Traditional down payment amounts ranging up to as high as 20% of the loan upfront are requested in order to reduce overall risk of the financial move. Compared to an SBA 504 loan which some small businesses use for similar reasons, only 10 percent is required as a down payment but the term and overall rate are much more in your favor but qualifying is more difficult.

Equipment Leasing

An equipment lease, in layman’s terms, is a rental agreement in which the owner of the equipment allows the use and possession of the equipment in agreement that the small business owner pays back a set amount, with an agreed upon payment structure for the duration of needed use to the business. For the sake of leasing, the lessor is the owner and the lessee is the small business owner using the equipment. The lessor is the individual who has paid for the asset and is willing to lend it out for a set fee which sometimes can be lower than any loan. Most lenders on the market offer equipment leases with fixed interest rates and terms, and these details are directly correlated with your business and personal credit profiles. Once again, make sure to conduct your own research because many companies offer the outright purchase at the end of the lease at a very fair price.  

 

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.

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