Obtaining Financing to Buy a Restaurant
For any aspiring restaurant owner, or current restaurant owner seeking to expand, it is important to understand how to obtain financing to buy a restaurant. To understand how to obtain financing to buy a restaurant it is important to have a basic understanding of the types of financing.
There are two basic types of financing, equity and debt. Equity financing involves finding someone who is willing to invest in the business for part of the ownership stake in the business. Debt financing involves finding someone willing to loan money to the business in return for interest on the loaned funds and payback of the loaned funds in some predetermined manner.
Regardless of the type of financing, the key to obtaining financing is understanding and providing the information people need to make a financing decision. Potential investors or lenders want to learn about how the restaurant will be operated, the background and net worth of the equity owners and the restaurant valuation in order to assess the risk of the investment or loan.
Business plans help investors and lenders learn about the business. A detailed and thorough business plan will illustrate the vision of the owner by describing the operational and marketing plans for the restaurant. The plan will also layout for investors or lenders how the owner foresees the restaurant performing financially.
A good plan will also include an analysis of the strengths, weaknesses, opportunities and threats surrounding the business venture. Most lenders or investors also want to know who they are going to be doing business with in as much detail as possible. Personal financial statements, tax returns and detailed biographies of equity owners provide insight into the net worth and experience of the owners.
Having a solid restaurant valuation is also very important. Investors want to know how much return potential there is on their investment while lenders want to know what the asset may be worth in case they end up taking it over.
The basic necessity for providing this information to any investor or lender is good restaurant accounting. The staff at Jeff Garcia, CPA specializes in restaurant accounting as well as business plan, personal financial statement and tax return preparation. The firm also offers excellent restaurant valuation services.
The services Jeff Garcia, CPA offers its clients are invaluable to a restaurant owner in the quest to find financing. We offer accounting services for restaurants of all sizes and styles. Our restaurant accounting services are tailored to the individual type of restaurant. From fast food to fine dining, from single outlet to multi-unit businesses, we have the ability to handle all restaurant accounting needs.
If you would like to know more about “How to Obtain Financing to Buy a Restaurant Franchise”, please call us Toll Free at (888) 933-food(3663) or (713) 621-1142.
