How to Acquire a Bank Loan for Your Restaurant

When you are opening a food service business, the funding you receive will be vital to the success of your business. Unless you have established savings, or know of some rich investors that might be willing to invest in your restaurant, you may need to apply for a bank loan. What you may not realize is that acquiring a loan for any business can be difficult, but even more so for a restaurant. The bank must be certain that the business idea is viable and that there will be a profit with which to pay back the loan. Getting a loan relies on more than a good credit history. Here are some other steps you will need to tackle to help you get that loan you need.

Business PlanHow to Acquire a Bank Loan for Your Restaurant

Before you even sit down to talk to the bank about a loan, you need both a business and financial plan. The business plan should be thorough and professional. The financial plan should easily show the bank your projections for the business. Both of these documents will help prove your case and show the bank that you are taking this matter seriously. Spend a lot of time doing your research and show those results in this important document.

Financial Plan

The purpose of the financial plan is to show the bank that this business has the potential to turn a profit. In the end, the bank has one goal. They want to know that the money they lend you will be paid back as agreed. You need to provide them with lots of research, as well as documented information about competing businesses and how they are doing. Proving your viability will go a long way towards securing the loan you need. When a bank is certain that they will get their money back, then they are more likely to lend it to you.


Another thing that a bank looks for is a guarantee that they will get their money back. In many cases this can come from the right collateral. There are many things that you can use as collateral to help secure the loan you are asking for, such as your house. If you have no collateral, you may still be able to acquire the loan with a co-signer. A co-signer is someone with a well established credit history that agrees to pay the loan back if you cannot. Both of these will give the bank confidence in your business venture, and help you towards being able to get a loan.

Don't underestimate the power of displaying your passion and desire to make your dream of opening a restaurant, a reality when you meet with the loan officer.When they see that you are fully committed to this endeavor, it will help them believe that you will do whatever it takes to make it successful. Regardless of how much research you do or how many documents you have prepared, if you do not have a single passion for your business, then it will not be a success. Banks love to see enthusiasm, especially when it is backed up by factual information about why this business will be more successful than the ones that may have failed in the past.

Found this article helpful? Read more relevant articles and how-to's in the food service industry.