Restaurant business never stops growing, proven by the numbers of new restaurants open for business every year. However, aside from the excitement and profits the restauranteurs can get from this business, owning a restaurant also have its own risk, especially in the first year of establishment. Upgrading equipment, staff additions, or expansions are common actions taken by restaurateurs to improve their business performance or sustain in the competition.

Financing any of these upgrades require a lot of capital, which is often not the case for small sized restaurants. Getting loans for restaurant business is not easy as well due to the industry’s high failure. Luckily these days, there are many loan products in the market which can help your business. However, as a restaurant owner, you must understand each of these funding options and choose which one would be best for your business needs.

Here are four best funding options for restaurant loans:

1. Traditional Small Business Loan
The traditional small business loan is available for any kind of industry, as long as your company qualifies for it. However, to be considered qualify for this loan is very hard, because they require you to have strong revenues, cash flow, and credit score. Hence why this type of loan is not too popular among new restaurant business or struggling restaurants who need more fund to survive.

2. SBA Loan
If you don’t qualify for a traditional small business loan, you can consider SBA loan. An SBA loan is essentially a bank loan, with single-digit interest rates. If you have a strong business plan on how to use the funds, ability to show why you need a loan, no debt obligations, and have previous experience successfully starting and running similar food businesses, this loan might be suitable for you.

3. Merchant Cash Advance
A merchant cash advance is something to consider if you are in need to secure funds in a hurry. This non-traditional funding product focuses on the restaurant’s daily cash flow performance because this agency provides their loan up front and will be paid back by percentage of your daily sales.  You don’t need credit history or collaterals to get approval, and the fund usually arrives within five days after your application. Merchant cash advance is perfect if your restaurant needs working capital.

4. Equipment Loan
Another non-traditional funding loan available is equipment loan, which is used to purchase equipment. With this type of loan, the equipment you are purchasing serves as collateral for the lenders, hence, it will be ideal for restauranteurs with bad credits or considered as risky borrowers who need better equipment to increase the value and profit of their businesses.

There is a lot to take to make sure that your restaurant is running successfully. Getting a loan is one of the economic standpoints you must consider in your business plan. These traditional and non-traditional funding products are suitable for the restaurant business, but you must consider which would be the best loan product for your restaurant needs at the moment.