The world’s population is increasing, and consumers will continue turning to manufactured food products, either out of convenience or necessity. Whether your food and beverage processing company grows or goes out of business will depend on you adopting innovative trends and procuring restaurant financing to implement necessary improvements.
Recognize Industry Trends
Consumers are becoming more health-conscious, governments are laying out environmental protection regulations, and food manufacturing industry leaders are moving toward cost-efficient production. For you, this means over-processed foods may see a decline as buyers start paying attention to ingredient labels and insist on ethically sourced, organic products. Laws that prohibit the use of certain refrigerants with damaging effects on the atmosphere require manufacturers to replace expensive equipment. And if you want your business to stay competitive by producing more for less, you should consider updating your process equipment.
Apply for a Traditional Bank Loan
The first place that many food industry business owners start with for funding is their local bank. A traditional bank loan is an excellent option if you have a strong revenue stream, solid financial history and a lucrative business model. Together with a low-risk credit status and a well-established relationship with your financial institution, you can qualify for the highest loan amounts with the lowest interest rates and the longest payment terms.
Check SBA Eligibility
If your business isn’t eligible for a conventional business loan with competitive terms, you may qualify for backing by the U.S. Small Business Administration. You’ll still need good credit, and you may have to offer collateral, but with the SBA’s guarantee of partial loan repayment in the event of default, participating banks can offer you rates and payment terms similar to those that larger companies receive.
Research Alternative Financing
Foodservice entrepreneurs who don’t have a well-documented operational or financial history can often find a restaurant financing solution from an alternative lender. Furthermore, since the application process and eligibility requirements are usually much less stringent than those of conventional banks, you can receive approval and funding in a matter of weeks instead of months. Alternative financing is especially useful in funding short-term expenses, as the average loan term runs less than five years.
Procure a Cash Advance
When you need funds immediately in a situation such as updating equipment to meet an impending regulatory deadline, a cash advance is quick with minimal paperwork and easy with low credit standards. Lenders who offer cash advances are usually more concerned with your future earning potential than your financial history. Therefore, if you’ve had money trouble in the past, this could be the ideal restaurant financing solution to help you ultimately increase your revenue.