The restaurant industry has experienced unprecedented disruption in the last few years, largely driven by accelerating technology. A recent study from Technomic forecasts that casual, fine-dining and fast-casual restaurants will see increased growth in 2019, while traditional quick-service restaurants and midscale full-service joints will see a slight slowdown.

With pressure to reach customers digitally and rising costs across the board (from interest rates to labor costs), it’s clear that restaurant owners can no longer rely on successful outcomes from doing “business as usual.” To thrive in today’s environment, restaurants must keep pace with these changes and offer a differentiated model that meets rising consumer demands, including personalization and convenience.

Amid the change in consumer preferences, technologies that enable open payments and “ghost” restaurants—restaurants that consist of a kitchen but no traditional storefront—are on the rise. But all this emphasis on technology comes at a cost. 

The good news? When it comes to financing, the ease of access has never been better to obtain an SBA loan. There are a number of options available for different needs, thanks to a rise in alternative lenders willing to fund small businesses.

Here’s what’s on the menu in terms of restaurant industry loan options.

Equipment Financing

The cost of equipment and machines can quickly rack up for restaurants, and paying for these necessities out-of-pocket can put a significant dent in your working capital.

With equipment financing, the equipment purchased serves as collateral, which eliminates the stress of putting your own personal assets at risk. This loan is an attractive option for startup owners or those seeking one-time purchases of restaurant equipment. For first-time business owners, equipment financing is also a win, since lower interest rates and longer repayment terms are available even if you don’t have stellar credit or a history as a business owner.

Inventory Financing

Due to fluctuations in sales, managing inventory is a common challenge for restaurant owners. Inventory financing can shape-shift depending on your needs to mean a short-term loan, medium-term loan, or line of credit. The defining factor is that it’s used for the specific purpose of purchasing inventory.

Just like equipment financing, your inventory acts as your collateral, which reduces your own personal risk. This also enhances your ability to grow as a business by meeting seasonal demands, buying in bulk, expanding product lines, and more.

Working Capital Loans

Working capital loans can cover a gamut of expenses in an expedient fashion, allowing restaurant owners to seize time-sensitive opportunities in confidence.

This loan can be the hot ticket for restaurant owners in need of capital for low to medium-sized business expenses (the maximum usually comes in at about $250,000) as they come up. Think: renovations, opening a new location, or taking advantage of a special deal from a supplier.

Lines of credit

A line of credit is another option for restaurant owners seeking flexibility. This type of loan allows access to a set pool of funds for when the need arises, which is especially beneficial if you run a business with different seasonal paces. Interest is due only on the amount you draw from your line of credit, which snaps back to its original amount after you’ve repaid.

At Cornerstone Capital Lending, we offer a variety of loan programs to help small restaurant owners finance and grow their business. Reach out to our commercial finance experts to explore the restaurant financing options right for your business.