Where can I get financing for my start-up restaurant? Asked on LinkedIn by Tom Leach.
MVH: Restaurants started by inexperienced restaurateurs have one of the highest mortality rates in business. Thus nobody wants to invest in them, not even your mother! Certainly not a bank.
One of my clients who runs a very successful restaurant, and who now has financiers offering to invest in his new locations, got his start by buying the restaurant where he worked out of bankruptcy for a very small sum. So then he had a restaurant with a location and a lease, all furnishings and equipment and permits, an established clientele, and employees including a chef. Financed totally from his savings built up while working there. He made it work by improving operating efficiency and customer service.
The likely sources of financing for this venture:
— Your own savings
— 2nd mortgage on your house
— Family, even though it’s very risky even asking them
— A private backer who strongly believes in your skills and concept
— A bank loan with a personal guarantee
