Know Your Financing Options


There are several ways to fund restaurant improvements—but which one is right for you?

Does your full-service restaurant need a patio expansion in time for spring and summer? Do your computer and reservation systems need upgrading, or is it time to switch to higher-caliber kitchen appliances? You may be thinking… “What is the best way to finance my restaurant’s renovation?”

There are several different ways you can obtain funding to improve your restaurant, but which one is right for you? Below are the main financing sources to help you evaluate when it works or when it doesn’t for your specific situation:

Personal Connections

Usually, the first place any business owner turns to for financing is his or her closest family and friends: people who you are comfortable with and trust.

When it works: Your family and friends are supportive of your business goals and want to see your restaurant thrive.

When it doesn’t work: If you’re unsuccessful in negotiating terms at the start, you can encounter big issues down the road. You need to establish the terms up front—such as repayment details, whether you’re backing it with collateral or becoming partners, and so on.

Individual Investors

If you are considering individuals or “angel” investors to finance your restaurant’s growth needs, you are choosing to either acquire debt or give away equity.

When it works: Choosing an influential financial source within your specific niche who can introduce valuable contacts may help get your restaurant updated and packed with customers.

When it doesn’t work: You are giving up a share of your business to financers, which means you sacrifice a level of freedom. Are you willing to pass control to someone else on little—or big—decisions?

Private Reserves

Often a temporary need for cash can be met easily by utilizing your credit or personal stockpile.

When it works: These days, a lot of cards offer perks or “extras.” Also, your business might receive security on purchases.

When it doesn’t work: Mixing your business and personal financial dealings could create the perfect credit rating storm. Don’t make things hard on yourself in the future with a potential hit to your DTI ratio. Accessing your personal savings is a quick remedy. Yet you risk your personal security if the business-side takes a turn for the worse.

Conventional Lenders

Most likely, you already have a current affiliation with a bank, and it is an obvious place to turn when you have financial needs.

When it works: Your bank may have previously extended a line of credit to use for your restaurant. Now you want to secure a long-term loan. You can increase the chance of qualifying if you are well-prepared and organized with a few years’ tax returns, market analysis, and revenue projections.

When it doesn’t work: Did you know that a mere 21 percent of small business loan applications were approved by banks in 2015? When you apply for a traditional bank loan, it can be damaging to your credit rating if you, in fact, don’t qualify. You need to think carefully about how much cash you need and what you can use as a warranty. Be able to describe how you’ll use the funds, as your bank might have restrictions on what you can use the money for. In addition, waiting to hear back on the status of a bank loan application can take up to four weeks or longer.

Contemporary Sources

Other financing options from alternate sources like Reliant Funding give you access to working capital for your restaurant with a fast and simple application process.

When it works: Qualifications for funding are based on your business’s recent gross receipts. You receive the money fast, taking days—not weeks or longer. You also remain the sole owner of your restaurant with complete charge over what you use the cash for. This wouldn’t be the case if you were working with investors, or even your bank.

When it doesn’t work: Newer financing sources characteristically extend short-terms that range from 3-12 months with exceptions that go to 18 months. If you’re looking for a lengthier repayment plan, alternative financing is not optimal. Also, the funding programs begin at $5,000 and do not go below that minimum threshold. Finally, start-ups generally do not qualify because most funders require one year in business and at least $10,000 per month in revenue.

Try treating your restaurant’s financing as a relationship with a reliable individual, and not just as a hasty one-time transaction. You deserve to talk to an actual person and not a computer, because you’re developing a connection that you can count on for years to come. Reliant Funding specializes in tailoring solutions for small business owners with the most versatility of funding programs anywhere.

The opinions of contributors are their own. Publication of their writing does not imply endorsement by FSR magazine or Journalistic Inc.

Amanda Figueroa

Amanda Figueroa is a marketing professional in the financial services industry. Reliant Funding provides customized, short-term working capital to small and mid-sized businesses nationwide. They’re recognized by INC Magazine among the 500 fastest growing companies in America—a result of high approval rates and first-class customer service. For more information, visit

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