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Financial Management, Restaurant & Bars

5 Ways Restaurant Loans Support Your Business

If you own a restaurant, you probably know that the restaurant business can be one of the toughest, yet most rewarding industries to work in. From managing inventory to hiring and training staff, restaurant owners have to invest a significant amount of both time and money in order to keep things running smoothly.

At one point or another, changing food costs and seasonal income can trigger fluctuations in working capital, causing many restaurants to seek additional funding to fill gaps in cash flow. These businesses often turn to restaurant loans to meet their immediate funding needs and work to grow their business.

How Restaurant Loans Support Your Business

1. Use a restaurant loan to meet seasonal needs.

Many restaurants experience seasonal demand, making it sometimes difficult for restaurant owners to maintain a positive cash flow throughout the year. After a slow period, many business owners may find that they need funding to prepare for the upcoming season. A restaurant loan can be used to purchase additional equipment, hire and train seasonal staff, purchase more inventory or create seasonal advertising in preparation for the busiest time of the year. This funding can also be used to help business owners pay their bills during the slow season by quickly providing funds to meet immediate needs.

2. Upgrade, repair or purchase more equipment with a restaurant loan.

Unfortunately, restaurant equipment will eventually break down or become outdated. Sometimes this happens without warning and other times restaurant owners can anticipate these equipment needs but may not have the funds on hand to repair or upgrade their equipment. Business owners can use a restaurant loan to upgrade or repair more equipment in order to meet their needs and keep a business running smoothly. A restaurant equipment loan can also be used to purchase more equipment to meet increased demand as your business grows.

3. Restaurant loans allow you to buy more inventory for special events.

Even restaurants who do not offer catering services may occasionally handle food and beverage needs for large special events or seasonal parties. Though these events can be great business opportunities for restaurants and often offer a high return on investment, some restaurant owners may not have the initial funds needed in order to purchase inventory and pay staff to work on these large event orders. A short-term restaurant loan offers business owners the ability to take on these special orders with ease by providing the funds to meet this immediate and temporary need.

4. A restaurant loan can be used to launch a website or marketing campaign.

Although every business hopes to have positive word-of-mouth advertising, most restaurants still need to develop marketing campaigns to let people know what they have to offer. A restaurant loan can give business owners the funds to cover all of their marketing needs, including design and placement of new print advertising, online display and social media ads and developing customer loyalty campaigns. Restaurant owners can also use short-term loans to pay for the costs associated with creating and maintaining a new website or updating an existing site.

5. Grow your business with a restaurant loan.

Business growth and expansion can be exciting! But it can also be quite costly. Some business owners may even find that they are growing faster than they are able to handle financially. Restaurant owners can use business loans to grow their business and fund expansion costs, such as purchasing new equipment, hiring and training more staff, buying additional inventory, expanding restaurant space and ramping up their marketing efforts. These loans can also be used to renovate your existing space or upgrade your equipment in anticipation of future business growth.

 

Once you have decided to seek funding for your restaurant, there are many restaurant loan options for your business. Whether you are looking for an equipment loan, an SBA-backed restaurant loan or a small business restaurant loan from an alternative lender like Kabbage, this funding can help support your business by providing capital for your immediate business needs and setting you up for success in the future.

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Kabbage Team

Kabbage is here not only to provide access to the small business funding you need, but to also help you grow your business through free marketing tips, webinars, tools and more. Is there something you'd like us to cover or want to get your small business featured on our blog? Send us a note at content@kabbage.com.