Pub and Restaurant Business Loans

Maximising Your Restaurant Business Loan: Tips for Growth and Expansion

• Develop a Clear Growth Plan: Identify the areas you want to expand, such as adding new menu items or renovating your premises. Develop a clear growth plan that outlines the costs and expected returns of each initiative.
• Prioritise Investments: Prioritise the investments that are most likely to generate a return on investment (ROI). For example, investing in new kitchen equipment can increase productivity and reduce costs, while investing in decor may not directly generate revenue, but it can aid repeat business due to a comfortable environment.
• Monitor Cash Flow: Keep a close eye on your cash flow and ensure that you have enough money to cover operating costs, loan repayments and growth initiatives. Consider using accounting software to track your cash flow and identify areas for improvement.
• Evaluate Marketing Strategies: Evaluate your current marketing strategies and consider investing in new approaches that can attract more customers, such as social media advertising or email marketing campaigns.
• Leverage Technology: Leverage technology to improve operational efficiency and enhance customer experience. Consider investing in POS systems, online ordering platforms, or loyalty programs.

With a solid growth plan and effective execution, your restaurant business can thrive and reach new heights.

How to Use Our Funding Solutions for Equipment Financing

1. Determine your needs: Before applying for a loan, assess your equipment needs. Make a list of the equipment you need, including the type, brand, and model number. Consider your budget, the age and condition of your existing equipment, and any regulatory requirements.
2. Research your options: Once you know what you need, research your finance options. Compare rates, terms, and fees to get the best deals (we can help you with this and match you with the most competitive lenders).
3. Apply for credit: Once you’ve found a suitable lender, complete the loan application process. Be prepared to provide detailed financial information about your business if needed, including income statements, balance sheets, and cash flow statements. The lender may also require information about the equipment you plan to purchase, depending on the type of finance you’re applying for (e.g., asset finance).
4. Purchase the equipment: Once you’ve secured financing, purchase the equipment you need from a reputable supplier. Make sure the equipment meets all regulatory requirements and comes with a warranty.

After this, you can pay your loan in the agreed timeframe with the predetermined repayment terms. If you have any questions about the equipment finance process, speak to a member of our team.

Equipment Financing for Pubs/Restaurants: Leasing vs Hire Purchase

Leasing:

Leasing equipment can provide you with access to high-quality equipment while reducing upfront costs. Leases typically include maintenance and repair services which can be advantageous, and some agreements offer flexibility in the way of allowing you to upgrade to newer equipment at the end of the lease term. Leasing is also the most tax efficient way of borrowing, as you are able to offset the whole payment against your tax liability.

Hire Purchase:

Financing equipment via a hire purchase agreement can be a good option for restaurants that are looking to own the equipment outright at the end of the agreement. You will likely need to have put down at least a 10% deposit, as well as pay all of the VAT upfront, so bear this in mind when deciding which option is best for the business.

Considerations:

When deciding between leasing and HP, it’s essential to consider factors like your restaurant’s financial situation, long-term equipment needs, and whether you want to own the piece of kit at the end of the agreement. If you need to conserve cash flow, you may benefit from leasing, but if you have the capital to put down a deposit, you may prefer this route as it is more cost effective in the long run.

Our team of finance experts can help you assess your equipment financing options and determine the best approach for your restaurant’s unique needs.

Managing Your Pub/Restaurant Business Loan: Interest Rates and Repayment Methods

• Interest Rates: The interest rate is the cost of borrowing the money from the lender. It’s essential to compare interest rates between different lenders to ensure you’re getting the best deal. The interest rate can be fixed or variable. A fixed rate remains the same throughout the loan’s term, while a variable rate can fluctuate based on market conditions.
• Repayment Methods: There are various repayment methods available to restaurant owners, such as monthly payments, weekly payments, or automatic deductions from credit card sales. It’s crucial to select a repayment method that aligns with your business’s cash flow to avoid any financial strain.
• Early Repayment: Some lenders may allow you to repay your loan early without penalty. This can save you money on interest charges and help you pay off the loan faster. However, it’s essential to check if there are any prepayment penalties before agreeing to the loan terms.
• Late Payment Fees: It’s important to be aware of any late payment fees associated with your loan. Late payments can negatively impact your credit score and result in additional fees.

By understanding the interest rates and repayment methods associated with your loan, you can effectively manage your finances and ensure you can repay your loan on time.

How much can I borrow with a pub/restaurant business loan?

The amount you can borrow with a pub/restaurant business loan depends on several factors, such as your credit score, revenue, and the type of loan. Generally, at Aurora Capital, we work with lenders offering loans ranging from £10k to £500k.

What is the typical interest rate for a pub/restaurant business loan?

The interest rate for a pub/restaurant business loan varies based on the lender, the loan amount, and your creditworthiness, with most lenders starting from around 7.5% per annum.

How long does it take to get approved for a pub/restaurant business loan?

The time it takes to get approved for a pub/restaurant business loan varies based on the lender and the loan type. At Aurora Capital, our application process is fast, with most lenders approving applications in 48 hours. That being said, it’s essential to prepare all the necessary documentation, such as accounting information and a business plan if needed, to prevent any stalls in the process.

What collateral do I need to provide for a pub/restaurant business loan?

The collateral requirements for a pub/restaurant business loan vary based on the lender and the loan type. Some lenders may require collateral such as equipment, property, or inventory, while others may offer unsecured loans where no collateral is needed.