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Getting financing for a new business is a common hurdle, what i have found in my endeavors, is to actually look at self financing by establishing your business credit profile before you go brick and mortar.
Most Business Owners find out about business credit after years of being in business, usually it's stumbled upon, or mentioned by the corporate attorney, accountant, or fellow business owner. What a lot of savvy entreprenuers are doing this day and age, are
1. Obtaining an Ein free from the IRS
2. Building A Website
3. Filing articles of Incorporation
4. Obtaining a Duns number (safely)
5. Ordering business suppplies from companies like Trade Smart Products that report your purchases to Business Credit Bureaus (Experian Smart Biz Reports)
6. Building up the "tradelines" on the business report with Net 30 Vendors that way they can get approved for Revolving Accounts.
There is a little more detail of course that goes along with this, but once the business credit file is established (like your personal credit) your chances of obtaining financing are increased 10-fold. That way when approaching a potential lender you can apply for the loan based of the business credit alone. If you get denied,or want more borrowing power, you can "PG" the loan (personally gaurantee) making you personally liable in case the loan defaults.
Most lenders require that you PG, but there are still some that don't. You will need a strong file.
As far as being unemployed, that is goin to be difficult, how are you going to pay the loan,credit card,etc.. back? Need to show some type of income.
Of course, it doesnt need to be shown to build business credit however. Hope this Helps
I know a few folks that are in the restaurant business. It is a very tough business even in good times. The fact that you are currently unemployed will make it very difficult to obtain a loan for this type of business. The capital needed to start up even a very small restaurant can quickly exceed $100,000.
If you are certain that you want to run your own restaurant, then you should probably start working on a very comprehensive business plan. The business plan, if done properly, will give you tremendous insight into what it will take to open the doors of your new restaurant.
Your start-up capital is unlikely to be funded 100% by a bank. You may have to tap into your 401K, family, or angel investors for initial capital.
Many jurisdictions have small business workshops & seminars that assist prospective entrepreneurs through the process of starting a business. They give you classes on marketing, accounting, business plan preparation, etc. The organizations that provide these services are called microenterprise programs, business incubators, etc. These programs are also excellent ways to meet local business owners who have already been successful in running businesses. These business owners are typically recruited to teach classes in these microenterprise programs. This would be a very good starting for you. Do a few web searches and see what is available in your area. If you need help finding one of these organizations, you may also contact the SBA or the Secretary of State. One of these entities will be able to direct you to a microenterprise program.
Why the restaurant business? I know that you simply are asking for information about a loan, but as a previous restaurant owner, I know just how difficult this business can be. Do you have experience managing a restaurant? If not, I suggest you seriously consider if this is the right business for you to gamble a loan on.
With that being said, you have a few potential options depending on a variety of factors.
1. You could find a restaurant that is for sale and see if the owners are willing to act as the bank holding the note and do a seller carry back. It can often be cheaper to take over an existing restaurant that has the necessary equipment and local following than to start from scratch.
2. Find a partner that is willing to go in with you on the business who (also) has restaurant experience, good credit, and sufficient cash reserves to invest in the business.
3. Go to BusinessMoneyToday.com and select the sections that apply to your scenario. Sometimes it is better to get multiple smaller loans for specific needs than to apply for one large loan to cover everything.
Best of luck.
Restaurant business is one of the most capital intensive enterprises. All of those industrial ovens, stainless steel sinks and refrigeration equipment cost money, not to mention the cost of the tables, chairs and other furniture.
All that expense means that you will probably need to borrow money to get the place up and running, and in order to attract the capital you will need, you need a solid financial plan in place. When you seek out a loan, whether from a government agency like the SBA or from your local bank, you need to provide a solid business plan for those entities to review. Creating a business plan for your proposed new restaurant is not as hard as you might think, but it is important to follow the proper format and include as much information as you can. In order to write a business plan, you need to take a look at each section, and how a business plan template can help you make the most of the data you have gathered. Business plan software can help as well, since it takes a lot of the drudgery and guesswork out of the financial projections that make up your restaurant business plan.
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I would like to open a small restaurant in the Baltimore/Washington area primarily take out with a small dining area. I am currently unemployed however I have a good credit score and am a homeowner. I am wondering what options I have as far as a loan and where would be the best place to start looking for a loan. Thank you for any assistance that you can offer.