Best Financing Options for Fast Food Restaurants
The small business lending space continues to evolve. As a result, small business owners have more options than ever when they are in need of financing for their restaurant business. This means you can look for a lender that is the right fit for your specific needs. From traditional banks to industry disrupters, the following are popular options:
In the past, fast food restaurant financing would normally come from a community bank. An individual owning a franchise would go to the bank as the de facto place for a loan. The reason for this was simple. Community banks were known for their:
- Knowledge of the local marketplace.
- Relationships with business leaders.
- Interest in building up small businesses in the community.
- Willingness to offer the relatively small loans small businesses need.
Community banks still possess many of these attributes. But changes in the market have left them less of a fit for many small business loan types. Many regional banks have consolidated in recent years. As such, there are more large, corporate banks and fewer mid-sized, regional banks. This has left many community banks facing a different market that leaves them less able to handle the risk of small business loans.
This doesn’t mean community banks aren’t a good option for fast food restaurant financing. They still provide small business lending options. But most are focused on relatively large loans that require complex, time-consuming application processes. For the most part, these lenders aren’t able to do the kind of small, quick loans that are often the best fit for fast food business financing.
The U.S. Small Business Administration insures small business loans provided by banks. This allows institutions, like community banks, to provide fast food restaurant financing at a more attractive rate. Because the loan is backed by the SBA, the bank takes on less risk to provide the funds. This allows for:
- Smaller loan amounts because banks aren’t taking on as much risk and can profit more easily as a result.
- Faster loan delivery because banks work within specific SBA rules for the loan.
- Higher loan approval rates because banks carry less risk than normal.
These factors make SBA loans a valid option for many fast food restaurant financing needs. The caveat is that they are still fairly similar to banks. While the loans are more accessible, you still have long approval processes. The SBA is more accessible for small business loans, but still isn’t a fit when you need money quickly or with a flexible structure.
Alternative Lenders for Fast Food Restaurant Financing
Alternative lenders, like QuickBridge, have changed traditional lending models to make the process of getting a small business loan simple and hassle-free. This is done by:
- Using a wide range of data sources to analyze loan applications.
- Providing fully online application processes.
- Focusing on small, short-term loans that present less risk.
With these three core attributes, alternative lenders can provide access to fast food restaurant financing in just a couple of days. All of this adds up to make QuickBridge ideal for:
- Working capital loans: Flexible capital that you can use for a wide range of purchases.
- Equipment financing: Loans designed for equipment you need to drive growth, such as fryers or ranges.
- Bad credit loans: Fast food restaurant financing based on cash flow analysis, not just credit history, to make funding accessible.
- Renovation financing: A small business loan devoted to a renovation project can get you quick cash to make small updates to your restaurant.
This is just a sampling of the types of loans alternative lenders like QuickBridge can offer. The key thing to keep in mind is that these loans are great for fairly small amounts of cash that you need quickly. If you have a cash flow problem, an alternative lender is great for fast food restaurant business financing. If you have a big project in mind and need capital, alternative lenders can be a fit. Working with a lender like QuickBridge is great for strategies that help you grow your business and sustain positive momentum.
Fast food restaurant financing is often available from specialty lenders. Here are a few examples to consider:
Fast food restaurants come with plenty of specialized equipment. From modern point-of-sale devices to commercial kitchen appliances, the costs can add up quickly. Many manufacturers provide special financing options to make equipment accessible to those who lack cash on hand. This can be a good way to get a loan for a specific piece of equipment or project. For example, you may have a manufacturer offer you a special financing package if you purchase your entire kitchen setup from them.
Many fast food restaurants operate as franchises. As such, those seeking to run a franchise can sometimes obtain funding from the franchiser that is selling rights. This can be a great way to get start-up capital when trying to get off the ground. However, this form of fast food restaurant financing is less of a fit when you are looking to drive growth and the franchiser may prefer you function more independently. Alternative lenders can offer franchise financing in those cases.