Restaurants have always had trouble qualifying for SBA loans, until now. SBA restaurant financing made easy!

There are many reasons why income can be a precarious test for restaurant owners. First off, it's extremely costly to own and operate a restaurant, things like workman’s comp and food cost expenses are over the top. Other matters such as acquiring an intemperate stock of perishable food, poor anticipation of the volume of business, and even the powerlessness to alter costs as frequently as the primary expenses vacillate. Possibly you have poor payment terms with the suppliers, or maybe the restaurant is located in a vacation spot, so your business is more occasional. Fortunately, there are different restaurant finance solutions that can provide necessary cash flow for such things as:

  • Expanding or remodeling your restaurant to bring in more customers
  • Purchasing new kitchen equipment or a POS system to improve efficiency
  • Advertising to attract more customers and/or promote special events
  • Boosting your cash flow to help with unexpected business expenses

Small Business Administration Loans (SBA) are generally the least expensive financing option for restaurant owners. The SBA 7(a) loan is the SBA’s most popular SBA Restaurant Loan product and offers a flexible sum of cash that can be used for anything, from managing daily operations to purchasing new restaurant equipment and refinancing high interest loans.

LVRG has strategically partnered with SmartBiz to offer our restaurant owner clients SBA 7(a) loans, with loan amounts from $30,000 to $350,000 in the most streamlined and efficient way possible. Why wait 7 months at your bank, when you can fund with SmartBiz in as little as 7 days?

Highlights:

  • Loan amounts from $30,000 to $350,000
  • 6% to 8% interest
  • Pre-qualify in minutes
  • Funds in as fast as 7 days after the application is completed
  • 10 year term with no pre-payment penalty

Details on Minimum Qualifications:

  • While there is no minimum credit score or revenue, most borrowers have a score of 650 or higher and make at least $50,000 annually.
  • For loans smaller than $150,000, you should have an annual revenue of at least $120,000. For loans over $150,000, you should have an annual revenue of about $300,000.
  • Each principal owner must personally guarantee the loan.
  • No outstanding tax liens.
  • No bankruptcies or foreclosures in the last three years.
  • No recent charge-offs or settlements.
  • Must be current on government-related loans.

2 Great Reasons to Apply for an SBA Loan:

#1. Least Expensive Financing - It would be tough to beat the low rates of SBA loans. SBA is an excellent option for small business owners looking to keep financing costs down.

#2. Great Financing for Growth - If your primary goal is to grow your small business, getting an SBA loan is an excellent way to reach that objective. You get the funds you need on manageable terms.

Small Business SBA Loans are great financing options for growth. You get the funds you need on manageable terms. SmartBiz uses “key indicators” to evaluate whether you’re a good fit for a loan: For loans smaller than $150,000, you should have an annual revenue of at least $120,000. For loans over $150,000, you should have an annual revenue of about $300,000. Your business also needs to be healthy, with no bankruptcies and a clean record when it comes to meeting debt obligations. 

Other Important Eligibility Factors for SmartBiz:

  • SmartBiz lenders can only work with businesses whose tax lien has been released. A payment plan is okay, as long as it has been released.
  • SmartBiz lenders require any owner of a business that owns more than 20% to sign onto the loan.
  • SmartBiz lenders will check your business credit score and requires a minimum score of 150 for FICO SBSS.
  • SmartBiz lenders require 3 years to have passed since discharge if you’ve ever filed for personal bankruptcy.
  • SmartBiz lenders have a minimum debt service coverage ratio of 1.15.

What Will You Need to Apply with SmartBiz?

  • 3 most recent personal tax returns
  • most recent business tax returns
  • Your balance sheet for the past year
  • Your profit & loss statement for the past year
  • Articles of Organization
  • Operating Agreement/By-laws
  • Business license
  • Insurance - General Liability
  • Insurance - Business Personal Property
  • Lease Agreement (if applicable)
  • Landlord Subordination Agreement (if applicable)
  • Certificate of Good Standing
  • Voided business check
  • Copy of your driver’s license
  • SmartBiz Reviews: The Underwriting Process

With SmartBiz, you can pre-qualify for a loan with just a soft credit pull. Since SBA loans can be so tough to qualify for, this is good news for borrowers who are unsure if they meet the SBA requirements and don’t want to hurt their credit score. That means if you apply and don’t pre-qualify, it won’t hit your credit report. Underwriting is the most important step of any loan process, so remember to be extra careful as you’re completing your application and ensure all information is correct. When you submit your financials, you will want to also make sure they are accurately prepared. As an SBA loan is a great product, it can also take some time to process. You don’t want waste your time to only be turned down because on incorrect information. Generally speaking, profitable, cash flow positive businesses that show they can afford their loan payments will have the greatest chance of qualifying. 

What Happens Post-Funding?

Once you’re funded through one of SmartBiz’s lenders, you’ll be provided statements online to keep up with the progress of your loan. Luckily, as SBA loans truly amortize, if you’d like to pay the loan off early, you can do so easily and with no cost. You’ll make monthly payments (debited based on when you were funded). Your first payment will be due one month after funding. Unlike other online lenders, there are no loan renewal options with this product. You can, however, always apply for another SBA 7(a) loan. 

Why Work with SmartBiz SBA?

SmartBiz has done something quite incredible by bringing SBA loans online. We like to call SBA loans the “golden goose” of small business loans. Everyone wants one, but they can be quite difficult to qualify for. On top of tough eligibility requirements, the application for an SBA loan can be extensive. However, with SmartBiz, and the merging of technology with the SBA process, it is now easier than ever. Outside of a bank loan, an SBA loan is the cheapest form of capital small businesses can find. If you can afford to wait a bit longer for your capital, then SmartBiz is a great fit. Think you've got what it takes? Click below to visit SmartBiz!