Capital is necessary to grow your business, but the money to invest in such growth may not be so easy to come by. Has your full-service restaurant applied for a bank loan and been denied? Keep reading to understand why, and to discover four benefits of using an alternative lender.
Understanding the Need for Loans
Full-service restaurants face many challenges that other establishments, such as those in the fast food and quick-service markets, do not have to consider. Full-service establishments must place a high priority on retaining repeat customers, which requires deep-rooted commitments to customer service, quality food, friendly employees, and brand awareness. Unfortunately, these research, inventory, and marketing costs can quickly add up, prompting restaurant owners to turn to additional sources of capital.
In terms of bank loans, restaurant owners and entrepreneurs have always been considered a high-risk investment. Although the economic landscape is changing, and more and more restaurants are experiencing growth, many full-service restaurants have been denied bank loans. Thankfully, your business may be eligible for alternative lending. Many alternative lenders accept mid-range credit scores and do not require any collateral, as their goal is to quickly offer loans. With a short application and quick turn-around time, your restaurant could be fully funded in a day or two. Here are four benefits of alternative lending for full-service restaurants:
1. Building a Better Brand
Brand recognition is one of the main ways you can attract both new and returning customers. Unfortunately, it is often difficult for locally owned establishments to compete with the branding power of long-established, nationwide chain restaurants. Independent restaurants must make the most of the marketing dollars by promoting their name wherever possible. Advertising is expensive, but alternative lending can help you make a significant return on your investment. Consider what mediums could be in reach with additional funding, such as television and Internet commercials, printed fliers or brochures, radio advertisements, and special events.
2. Committing to Customer Service
Providing high-quality customer service starts with hiring reliable employees. Your wait staff are not nameless, rotating faces behind a long counter, but rather the individuals your customers will interact with throughout the course of their meal and during repeat visits. Full-service restaurants also need quality hosts and cooks to complete the experience, as customers will remember every aspect of the visit. Keep in mind that many will return home and immediately post either their positive experience or a bad review online. Additional funding from an alternative lender will help you stave off bad reviews by allowing your business to hire professional, reliable employees.
3. Expanding Your Menu
In order to draw repeat customers, you should consider adding seasonal favorites or new creations to your menu. Understandably, however, you need the additional capital in order to experiment with dishes and increase your purchase inventory for the week. This money could also go toward hiring a new chef or redesigning your menu and included dishes with the help of a menu consultant.
4. Maintaining Inventory
Customers will make reservations weeks in advance or stand in a cramped entryway for extended periods of time for the chance to eat at a much-loved full-service restaurant. These same customers, however, will turn away and go elsewhere if you continually run out of inventory. If you cannot offer a full range of menu items each time your customers come to visit, they may stop trying. Purchasing inventory includes buying enough food and beverages, but also plates, utensils, and kitchen supplies.
Readily available financing from an alternative lender will help you keep from having to cut corners in your restaurant, from menu choices to customer service. Additional capital will also help your business thrive and expand. Companies such as LVRG specialize in providing working capital to help small businesses grow, doing so quickly and efficiently. For a full-service restaurant looking at growth, a company such as LVRG is definitely a good place to start.