If you are a restaurant owner, you understand that having a secured working capital is very important for the sustainability of your business. With the amount of regular expenses you have to spend in any business situations, you need a steady cash flow to cover your expenses.

Working capital pays for your daily supplies, payrolls, rentals, etc. Yet, as a restaurateur, you also need to secure some fund for other expenses, such as an emergency fund or expansion fund. If you plan to open another restaurant, or if this is going to be your first restaurant, you need to calculate how much money you need to open a new restaurant, or the cost of your expansion and growth plan.

A simple  illustration of what is the working capital you need to start a restaurant includes:

  • Land & building, whether you buy or rent
  • Kitchen appliances such as stoves, freezers, ovens
  • Furnishings such as tables and chairs, decoration, bar set
  • Silverware, plates, glasses
  • Salaries
  • Utilities such as electricity, gas, rental
  • Daily supplies
  • Marketing activities

From the list above, we get the idea how much working capital a restaurant owner must prepare for his business. On top of that working capital, restaurant owner must also prepare emergency fund to cover his expenses when the business deals with slow downturn or if the restaurant needs quick repair.  This is when funding is very much needed for your business. The funding will help your restaurant to grow and expand at the speed you want it to be.

Unfortunately, it is not easy for restaurant owner to get funding from banks. The restaurant industry has been known as a risky investment, according to traditional funding standard. It is very rare for a restaurant to get loans from banks or other lending institutions. To solve this problem, the solution is to be proactive in finding for alternative funding institutions. You need to find other lending institutions which are friendly to the restaurant industry.

Here are several alternative fundings in the market that’s available to finance your restaurant’s working capital:

1. Restaurant Business Loans:
Since it’s not easy for restaurant owners to get loans from banks, many non-traditional institutions provide lending for the restaurant. Restaurants which were denied access to bank funding, usually enjoy the simplicity offered by these institutions. To be able to get working capital from restaurant loans, you need to prove that you have a steady cash flow, proper business plan, and collateral.

2. Merchant Cash Advance:
Merchant cash advance is very popular in the restaurant industry, due to its flexibility and quick funding. Merchant cash advance offers a fast and easy application where you don’t have to provide credit ratings history and collateral. Merchant cash advance providers only need information such as your the size of your restaurant and your daily sales transaction volume. The review process is fast, within 48 hours  you will get your approval and receive your working capital immediately after the approval.

Another benefit of choosing merchant cash advance as your funding partner is the flexibility in utilizing the fund. You can use the fund to finance the expansion of your restaurant, or use it to upgrade your kitchen equipment. It’s your call.