| Find restaurant expansion generally refers to | | | | Find restaurant financing generally refers to a |
| business owners looking for financing to expand | | | | potential business owner looking for funding |
| their existing restaurant. Businesses choose to add | | | | sources for a new restaurant business. Once an |
| new restaurant locations when they experience a | | | | individual has an idea of what kind of restaurant |
| steady increase in profits and want to attract | | | | he or she wants to buy, funding that purchase is |
| more customers. There are many financing | | | | the next step. Restaurant financing is not much |
| resources available to expanding businesses. | | | | different from other business financing. Start-up |
| If a business already has most of the funds it | | | | business owners usually have some difficulty |
| needs for restaurant expansion, but still needs | | | | securing funds from traditional lenders, such as |
| additional financing, it may turn to factoring. | | | | banks. Therefore, they look to other financial |
| Factoring allows a business to sell its accounts | | | | resources, including the Small Business |
| receivables at a discount to another company, | | | | Administration (SBA), private investors, |
| called a factor. Factors require businesses to | | | | non-traditional lenders, and many others. |
| process credit card orders. Factoring is not | | | | The SBA's 7(a) loan is available to small business |
| considered a loan, and, depending on the factor, a | | | | owners who have been denied traditional loans |
| business can obtain hundreds of thousands of | | | | and who have proof of ability to repay the loan. |
| dollars within a week's time. | | | | The SBA generally defines a small business as |
| Another way to find restaurant expansion | | | | employing fewer than one hundred employees, |
| financing is to obtain a construction loan from a | | | | and their loan funding is available for most |
| lending institution or construction company. | | | | business purposes, including restaurant financing. |
| Lenders usually require personal and business | | | | Another way to find restaurant financing is to |
| financial documents to assess the risk posed by a | | | | consult a private investor. In exchange for large |
| business. The higher the risk, the less likely a | | | | sums of funding, private investors usually ask for |
| business will obtain the loan it needs. Construction | | | | a certain percentage of the business's profits or |
| companies may also offer financing that only | | | | to have a voice in business decisions. It's |
| requires a down payment and collateral to secure | | | | important for business owners to find investors |
| the loan. These companies generally provide | | | | who provide equity, not debt. Debt means that |
| better loan terms and interest rates than | | | | the owner would have to pay interest on all or |
| traditional lenders. One benefit of construction | | | | part of the amount invested. |
| company financing is no payments until the | | | | Business owners may also look to financing from |
| construction is completed. Like with any financing | | | | the restaurant's current owner in order to find |
| option, the loan amounts, interest rates, and | | | | restaurant financing. When a seller is willing to |
| repayment plans vary by lender and by the | | | | finance a restaurant purchase, it shows that he or |
| applicant's financial history. | | | | she is confident in the profitability of the business. |