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    8 Replies Latest reply on Oct 24, 2008 9:21 AM by lfreeman

    New Small Business financing

    Newcomer Newbie
      To anyone willing to shed some light on this for me:
      I am looking to open a small restaurant (short order style) with my husband. He would be the cook and I run the books. Being that this is our first restaurant business I have questions that may seem a bit freshman for those who have been in industry a while.
      1. We need to get a small buisness loan and do not require a large amount ( under 100K) to get it moving. Meaning the purchase of the biz, equipment needed etc... Since this is an existing restaurant with its established clientele, would it still be difficult to get the loan?

      2. When I apply for the loan do I have to provide a business plan to the bank? What other type of documents would they be requesting from me?

      Any help or suggestions are greatly appreciated!
        • Re: New Small Business financing
          LUCKIEST Guide
          New Small Business financing, Welcome

          Who are you?? Where are you?? Do you know about SCORE?? SCORE is FREE and helps people (going) or in business both in person and on line.

          One of the first items a lender (bank) will want to see is a Business Plan. SCORE can also help with the business plan. Other documents might include prior year income tax returns.

          Good luck, LUCKIEST
          1 of 1 people found this helpful
            • Re: New Small Business financing
              Newcomer Newbie
              I am a newcomer to this side of the biz. My husband and I are taking a chance on a passion he has had for years. We just so happened to come across a great location for the biz and the price is right. I just want to make sure I take all the steps I need in order to keep all my ducks in a row.

              Thank you for your input. I have not hear dof SCORE but will take a look into it. I already have contacted the town in which the biz will be located to make sure I cover all my ground with them but wasnt sure if the bank will take a chance on us. I mean I have excellent credit and just have that gut feeling that it will do well.

              Thanks again!
            • Re: New Small Business financing
              GrowthCurve Adventurer
              It's difficult to finance a restaurant because there's usually not much good collateral available. You don't have any real estate (assuming you're leasing), you don't have any accounts receivable, you don't have any inventory (not that inventory makes great collateral), and your fixed assets -- the equipment -- probably don't hold their value very well (especially when you add in the cost of seizing and relocating).

              Do you have any personal assets that you can pledge for this loan? Equity in a home? Stocks, bonds, etc.?

              Frankly, I think your best bet is to go to a small community bank and ask if they do SBA loans. If they do, make an appointment to speak with someone who does small business loans. Ask if there's anyone at the branch with the loan approval authority for up to $100,000. My guess is that anything over $25,000 will need to go to some sort of underwriting team or committee, but you never know.

              Anyway, go to the bank and just ask them, "We'd like to buy a restaurant and we'll need a business loan. What do you need from us?"

              There are those who will say you should do all your preparation first, but it sounds like you're pretty new to this. I'd just go to the bank and let them be your guide. Any good banker worth his salt will find a way to get that loan done, assuming it's doable.

              But like I said, loans are hard to come by these days, especially for a restaurant.

              They will probably want to see a business plan, your resumes, your financial statement, and a 2-3 years' worth of tax returns. They'll also likely get a credit report.

              How are your personal finances?
              1 of 1 people found this helpful
                • Re: New Small Business financing
                  Newcomer Newbie
                  Thank you so much for all your insight.

                  You know when you have a gut feeling that something will go good. Well that is how I feel about this. I am actually quite the opposite when it comes to taking chances with my money.

                  The good things I see with the possibility of this restaurant are:
                  1. It is already estabilished in a very busy area and there is not a place like it with the same type of cuisine we'd be doing.
                  2. The guy is selling it cheap (35K) since he would like to move back to his country.
                  3. Lease is cheap and is valid until 2011 with water included.

                  Those are just a few things.

                  My credit is excellent and I do own a home that does have a nice chunk of quity in it.
                  my personla finances are in excellent standing as well.

                  My main concern is making sure i cover everything I need to be successful.

                  A few other things I have going for us is that my husband would run the business during the day while I am at work. That allows me to continue with the stable income and insurance etc..
                  And alos the fact the my father is in general construction, so any modification I need to make to the restaurant can be done by him.

                  What do you think? Good chance for me?
                  BTW, do you know what the current interest rates are on loans for small business?
                    • Re: New Small Business financing
                      GrowthCurve Adventurer
                      I would not do anything until you renegotiate the lease. A three-year lease is way too short. You'll spend all that money on your business, and then your landlord will have complete leverage over you when the lease runs out.
                      • Re: New Small Business financing
                        funds29 Wayfarer
                        Please review our site I think you are good fit for what we offer. Restaurants are a nightmare to finance but if you are credible meaning good character there id a possiblity your local bank may finance you. However, I would not use the equity in my home it is important to keep business and personal separate. Payroll, food costs, and rent comes very quickly not to mention marketing so used our unsecured program let us take the risk and you enjoy the benefits.
                    • Re: New Small Business financing
                      lfreeman Newbie
                      Hello, I am a semi retired CEO of a major domestic Comapny. I invest my own funds in start up companies as well as offer consultations. If you would like to speak with me please feel free call me at (904) 707-0226.

                      I hope to hear from you.

                      L. Freeman