Starting and growing a restaurant can be a money intensive proposition. Buying or renting space, kitchen equipment, and furniture is only the beginning. Add to this the utility, salary and inventory, and it’s no surprise that so many restaurant owners struggle to make ends meet.
However, there are many sources of capital available to business owners who understand, and perhaps nothing is so important to the health of a restaurant that grows rather than debt. Loans, rent, credit cards, mortgages, and personal records of all kinds can make a new restaurant take off, or help a thriving restaurant grow.
No Money Down
Jimmy Kavopovis, 42, is the proud owner of Steele Creek Caf ?, a fast food-friendly place in an office park environment. This is the third restaurant business. The restaurant industry is currently very challenging, Kavopovis said, and finding loans for growth is part of the challenge. “In the past you could place equipment for collateral, but times have changed,” he complained. “Banks don’t lend money to restaurants that often.”
Nevertheless, Kavopovis has succeeded in developing a thriving business through the use of creative credit – both traditional and other. He built and owns the building where Steele Creek Caf is? operates, and owns another building – formerly the home of his first pizza restaurant.
“Restaurants are very capital intensive,” said Lesley Kohn, principal at Nextaurant, Inc. San Francisco. “So there are some extraordinary ways to increase debt.” Nextaurant works with chefs and owner-operators on budgeting, fundraising, and operations. She has no lack of ideas and advice about using loans.
“Look at it holistically; too many companies are underleveraged,” Kohn says, referring to debt’s ability to multiply an owner’s profits without additional out-of-pocket cash. A holistic view of the business includes forecasting the budget for three to five years, understanding your personal income needs, and balancing the amount of debt with other factors, including cash flow and equity capital invested.
One weakness that Kohn most often sees among restaurant owners? “There aren’t enough people in the restaurant business to manage their numbers,” he said. “You must have a good budget to know what you are looking for.”
If the business owner knows how much money is needed in the long run, and how much profit (or cash) is left to make loan payments, then getting a loan will be much easier. Kohn said he had helped secure debt from various sources, but the basics were the same – to be able to borrow money, you had to be able to show how you would repay it.
Where to Look
When it comes to finding lenders, it helps to think broadly “We’ve dealt with banks, as well as a ton of private sources, ranging from [commercial finance] institutions, the SBA, friends, family, angel investors, and other high net worth individuals,” says Kohn.
Each source of capital has its own advantages and disadvantages. Banks and commercial finance lenders tend to have higher rates of interest, while individual investors may …Continue reading
“We might be able to arrange arrangements for your repayment. Can you bring at least one payment by Friday?” In a two-sentence discussion with the borrower, the employee serving your loan may have just planted the borrower’s litigation seed.
“They said they would work with me.” If you institutionalize the foreclosure action later, the borrower can state that they are “in negotiations” with your company to prepare a payment plan. Such claims can lead to other arguments in muddy areas that seize collateral.
From the borrower’s point of view, when does the loan officer’s actions cross the line between normal daily communication and the actual agreement to modify the loan agreement or delay the collection action? The answer to this question can be very subjective.
What is the solution?
Enter – Pre-Exercise Agreement.
With the Pre-Training Agreement, the borrower and lender agree that there is no training agreement, there is no postponement of billing actions by the lender / service provider, and there is no modification of the terms of the loan agreement or lenders’ rights, unless the agreement is made in writing and implemented by all parties.
Actually, the term “Protocol Agreement” should be used, rather than “Pre-Training Agreement.” It might be wise to avoid using the term exercise altogether. Their use, either orally or in writing, can enable borrowers to claim that they rely on representation that some arrangements or modifications will be made.
WHEN and HOW to use the “protocol” agreement:
Strengths of Procedure:
Where the borrower has entered into a protocol agreement, you have a clear protection element. But what about bad borrowers who haven’t, or won’t, implement a protocol agreement?
In this complex field, which is clearly stated, written procedures and protocol letters can help avoid misunderstandings and reduce responsibility.
Written policies and procedures for loan service staff, (or anyone who interacts with your borrower) can prove to be helpful when defending against borrower claims. In making the procedure, you might want to consider dividing all loan officer / borrower conversations into two different categories:
Basic conversation, pure information:
“Where do I send payment?” “When will you send us your April 1 payment?” Strangely, there is little that can be said by borrowers without stepping into the field of negotiations and agreements. Decisions must be made about the extent to which the conversation can proceed without the steps outlined below.
Arrangement or negotiation conversation:
If the borrower shows that they will bring the April 1 payment and May 1 payment on May 9, they have just proposed a loan exercise. When the person serving your loan recognizes this arrangement, you have just signed an unwritten loan training agreement. Even though this is an extreme example, it shows how easily you can step into negotiations and modifications. It may be necessary to empower your staff to make certain limited payment arrangements. With written procedures, you have the opportunity to explain clearly what, if there is a variation of the payment that is required by contract …Continue reading
These days there is plenty of loan advice available to consumers. It is a good idea to make use of this expert help to ensure you are making informed decisions about your next car loan. The auto finance market is big and complex and it can be too easy to make mistakes if you are new to the game.
Buying cars using finance products can work out very well. Finance is not as readily available as it was before but there are still many options that can be tailor-made to meet your individual needs. It is no longer always the case that you will be better off using your savings to make a car purchase. You may find that taking out an affordable loan and leaving your savings earning you interest could be better for your finances overall.
Make sure you check your figures carefully though and get as much loan advice as you need to work out the best options for you.
You do need to spend time looking at the car finance market. There are lots of great deals available but not all of them will be able to offer you the features you may need. It is important you get professional loan advice before you sign any new agreements. The costs of car finance packages can vary significantly and you could end up spending more than you need to if you are not very careful.
A professional loan advice service will be able to help you look at your options. This will include products such as bank loans, credit cards, mortgage advances, dealer finance and so on. Each of these products has pros and cons. Getting the right loan advice can help you to avoid those finance deals that will be unsuitable for you and make sure you get the best deal for your budget and requirements.
There is plenty of expert loan advice available online. This is a very convenient way for you to find out more about the car finance market. You can visit loan advice websites any time of the day. This means you will not have wait until standard business hours to find answers to your questions.
Online loan advice services can provide helpful web pages that cover a number of different car finance issues. One of the most useful tools available is the car loan calculator. This simple online resource allows you to compare car loan deals at just the click of a button. This way you can find out what they are really going to cost you so that you can cut through the marketing hype and make a more informed choice.
Go online today and find out what you need to know about car finance.…Continue reading
Finance deals are widely available these days and this can be a great way to get the money you need for a new car. However there are so many different products out there is can be difficult working out which one is best for you. This can leave many consumers feeling very confused and unsure about what to do for the best. Fortunately there is plenty of professional loan advice available online now to help you make the right decision.
The Internet is a great resource for financial issues. There are many websites offering practical advice on taking out products such as personal loans, hire purchase agreements and more. Here are a few tips to get the most out of online loan advice resources:
– Reputable Providers – You do need to be careful about advice published on the Internet as not all sources will be accurate and up to date. Make sure you are using a reputable loan advice website that can offer professional and experienced information.
– Quote Comparison – online quote comparison tools are very useful and provide a fast way to compare the best deals. However you do need to make sure you are doing ‘like-for-like’ comparisons. This means using the same borrowing figure and loan term each time. This provides you with the right information to compare quotes effectively.
– Updates – if you get a great quote online then make sure you act on this as soon as possible. The loan markets move fast and if you leave it too long then the quote may no longer be valid. If you contact lenders directly they may offer you quotes valid up to a certain date only so make sure you check this carefully. Before you sign up to a quote it can be a good idea just to check online quickly and make sure no better offers have come up since you last looked.
If you do not have access to the Internet or would prefer to speak to someone in person then many websites also offer independent telephone loan advice to support their online resources. You will be able to speak to an experienced advisor in person. They will be able to help you work out how much you could afford to borrow and what sort of loan would be best for your car purchase. This is ideal if you have never taken out a loan before and have lots of questions you want to ask.
Getting professional loan advice can help you to avoid some of the common pitfalls. These can include taking out loans that are too high (and place a strain on your finances) or too low (not enough for your needs).
This can also help to make sure the financial product you choose is suitable for your circumstances.…Continue reading
When you invest in something you are speculating a future move or price change that will enable you to make some money out of it. I believe that every time you are investing you are speculating as well, even though speculating sounds a lot worse than “investing”. This definition can be found on multiple books and all around the web.
Some people might disagree with it, but if you read Max Gunther’s famous “The Zurich Axioms”, then you understand why there is no difference between an investor and a speculator. Some people believe that when they are investing, they are doing for the long term, that they are doing a good thing by putting some money on other people’s hand that they believe they will be able to put it to a better use.
Speculation is often seen as a short term type of investment. Whether it is a swing trade or a day trade system, it does not matter, it is speculation and at the same time an investment. I don’t believe that the meaning of these two words could be only defined by how long a trade or investment lasts. This is way too simple and would not convey with what really goes on in the stock market.
Do not be afraid to call yourself a speculator.
The sooner you realize that there is no difference between the two, the sooner you will get rid of the burden of not feeling good when you have made a quick profit on the markets. There are loads of different strategies that you can follow in any particular occasion: they can be long-term, short-term, seasonal, etc. But all of them are speculations and investments. Regardless of what you may call them, just make sure you profit from them and let the others wonder whether you are speculating or investing.…Continue reading