Part 1: Restaurants are back, but they face big challenges.
The pandemic revealed just how much Americans love to eat out. Now patrons are filling dining rooms and drive-thrus again, even in the face of high inflation and rising menu prices.
All this traffic should have restaurant owners and operators investing in new and improved equipment to better serve their clientele.
But squeezed by small margins, a tight labor pool, and rising costs on all sides, many of them don’t have the funds to invest in the higher-end equipment and technology that could grow their business.
Let’s look at why—and see why equipment financing from TimePayment and LeaseQ is vital in this unprecedented time.
We’re the fastest way
Keep reading for special programs designed with restaurants in mind.
It’s really hard to get a loan right now.
Small business loan approval rates at big banks (those with more than $10 billion in assets) slid downwards all year long, stalling out at an even 13% in October and November 2023, reports Monitor Daily.
- Small banks are picking up some slack, but approval rates are still below 20%.
- Credit unions, often a friend to small businesses, haven’t been much help either, with approval rates hitting a new all-time low (19.7%) in November.
It’s even harder for restaurant owners and franchisees.
As you probably already know, restaurants face unique challenges in obtaining financing, even compared to other small businesses and start-ups.
Some of the many reasons restaurant loan applications get denied include:
- Restaurants are seen as “risky”: Restaurants start at a disadvantage, because many banks see the industry as a risky investment. That means applicants are held to higher standards and have to jump over more hurdles than other small-business owners.
- No business credit history or a short time in business: Restaurateurs are often caught in a catch-22—without credit, you can’t get your business up and running; without business up and running, you can’t get credit.
- Low personal credit score or too little collateral: If you don’t have a business credit history to show, your own credit comes under the microscope. Too many hiccups can sink an application. Likewise, it can be difficult to secure a loan if you have no collateral to offer, and unsecured business loans often come with high rates and fees.
- Too much debt: Even with a decent credit score, if you’re already carrying too much debt, you have a real problem. Entrepreneurs who max out their lines of credit early in the process often find themselves squeezed when it’s time to actually fit out their kitchens and they can’t secure another loan.
- Too small a loan: Amazingly, some start-ups simply don’t want to borrow enough money for their banks’ taste. It can often seem like banks and other financing companies ignore restaurants’ FF&E (furniture, fixtures, and equipment) needs, especially when the deal size is below $20,000. (Keep reading to see how TimePayment and LeaseQ can help!)
What We Hear From Customers
“The salespeople say my equipment purchases are too small for financing, so I usually have to use cash or credit cards for equipment under $10,000.”
TimePayment has equipment financing programs that start at $500. So you don’t need to run up high credit card bills to get your business going.
But there’s good news: equipment financing.
When banks close their wallets to restaurant owners, TimePayment and LeaseQ can help.
Our flexible, affordable equipment financing programs help you get the equipment you need for a low monthly payment.
- Choose the program that works for you. You get to select from a variety of programs and lease terms—including Fair Market Value (FMV) and Lease To Own (LTO) leases, so you can find the financing option that works for your budget. You may even qualify for our $1 Buyout and Turbo Lease programs, when available.*
- We work with you whatever your size. We finance transactions as low as $500 and we have programs for applicants with challenged credit, including FICO scores as low as 550.*
- Financing opens doors. Because you only need to budget for the monthly payment, and not the full sticker price, that opens the door to more efficient, high-performance kitchen equipment you might not otherwise be able to afford.
Build your business and put your equipment to work earning profits throughout the life of your lease term.
*Some exclusions may apply.
Ask your dealer about…*
Special Programs for Restaurants
- 90-Day Deferred Payment Programs: Put your equipment to work now. Start paying in 90 days.
- EARLYPAY: Our early payoff option puts you in charge of your spending.
- $29/mo. Payments for 6 Months: Enjoy special manufacturer programs—see your dealer for details
*Special offer terms, conditions, and exclusions may apply. Contact TimePayment or LeaseQ for details.
Want to get started? Contact us or…
Stay tuned for Part 2, when we’ll laser in on how equipment financing is the ideal funding strategy for restaurants.