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I Want To Start My Own Restaurant Business But What Finance Options Do I Have?
So you want to start your own restaurant business but your worried you can't raise the finance you need to set your business up, if so this article is for you. I will cover the different options that you may want to think about where you can get finance for your new restaurant business, the following are: -
â€¢ Your friends and family - you may think this is the best option if they have the finance available for you, but you have to remember they will only have a certain amount of money available and proberly wouldn't be able to give you more if you ran into trouble and also you may feel bad not being able to repay them as quickly as you thought you might be able to, as making a profit in a business can take a good year or even more.
You will also have to discuss what interest you would give them, all this may cause problems with your relationships with the person or persons is it worth it, give it a thought.
â€¢ Your savings - if you have a good amount of savings you may be able to use them for your new restaurant business, it depends on the amount you have saved. This amount may run out quickly and if it does you would have to have a plan b in which you could get finance from elsewhere.
â€¢ Credit Cards - they offer you money to buy items but if you wanted cash from these they usually charge a daily interest rate for this. Credit cards also have a maximum limit on these depending on your credit history this might be only Â£3,500 and this wouldn't get you far in setting up your business so you would have to take out more than one card, but also you have to pay a minimum amount every month and when your setting your business up and have no income coming up you may not be able to afford the minimum payments every month.
â€¢ Home Equity - using your home as equity can be a very risky, what happens if your business doesn't work out the way you think it would and you couldn't pay bills etc. your house may be taken away from you leaving you with no house to live in, you need to seriously think this one through is it worth the risk?
â€¢ Bank Loans - you may be able to take out a bank loan if you have a good credit history, the amount you may be given is up to this and therefore it could be a few thousand pounds but it could be a lot more like fifty thousands pounds. Interest would be calculated every month and it depends on the company on how high this may be.
â€¢ Angels Investors - business angels can give you from twenty five thousand to up to two hundred thousand pounds depending on how many angels group together if this is possible for your business. The angel or angels will provide financial backing for you at the correct time and will give you advice but won't be involved in the running of the restaurant on a daily basis. Be prepared as they will want a good stake of the company so they can get the money back they invested and more, but they can be very helpful as they may have done the same or similar to you only a few years ago and made a success of their business enabling them to help others out.
â€¢ Venture Capitalists - they provide financial backing for your new restaurant business but also help you sort out how to run the restaurant and help make important decisions etc. They will also want a good return for their investment like the business angels.
All of the above are options available to most people and I'm sure whatever circumstances you're in you will find appropriate funding for your restaurant business.
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