Whether you are planning to enter this business or you wish to upgrade the obsolete equipment in your restaurant, chances are you don’t have enough money to do it.
If there’s not enough cash flow in your restaurant, decades of experience won’t help either. So how could you purchase your much-needed restaurant equipment if there’s not enough money in your bank account?
For starters, you could use these tips. They can be applied by anyone who finds themselves in a predicament, but caution is recommended since we’ll be talking about things that can go south in the blink of an eye.
Things you can do to get financing:
- Apply for a commercial loan
Commercial loans are handed out to businesses that need quick money. The terms are usually considerably shorter than those on other types of loans (1-year max) and can be secured or unsecured.
Due to the short term, the sum of money you will be able to borrow is quite limited, although not necessarily. This all depends on the lender and how trustworthy you are, i.e. how good your credit score is.
- Apply for a credit card
A credit card is still a form of a loan, even though it doesn’t look like it. After a contract has been signed between you and the bank, you will be able to use a certain amount of money to buy your equipment.
Afterwards, you will be paying the money back in installments. The money will go back to the bank. It’s a win-win situation, but be careful: many people ended up in huge debt. Do not spend more than you’re allowed to.
Moreover, do not miss any of the installments, or else you’ll be penalized financially. Your credit score, too, will get a hit for each time you miss a monthly payment.
- Consider leasing
Although not a method of financing in itself, leasing can prove to be a cheaper alternative to getting a loan. When you lease the equipment, you’ll pay a monthly fee to the lessor in exchange for the freedom to use that equipment.
In some cases, at the end of the leasing term, you can either buy the equipment altogether or just renew the contract. Leasing makes more financial sense for those who cannot get commercial loans, for a reason or another.
- Hard money
Hard money refers to funding given by a private investor or a private company against one’s property. With other words, you get money by securing the loan on your restaurant or your house.
It’s a dangerous practice, but you shouldn’t worry if your financial behavior was always peerless. Having the loan secured will be one more reason for you to keep it that way.
The funding for equipment comes in various shapes and sizes. No matter how much you need to buy some state of the art refrigerators, ovens and whatnot, you can rest assured you’ll find a suitable option for the situation you find yourself in.