Industry Insights

Restaurants have unique funding needs. Here's your complete guide:

Top Funding Options for Restaurants:

1. Merchant Cash Advance Best for: Quick capital, flexible payments

• ●Matches daily card sales naturally
• ●Same-day funding available
• ●No collateral required
• ●Higher cost but high flexibility

2. Equipment Financing Best for: Kitchen equipment, POS systems

• ●Equipment as collateral
• ●Tax benefits (Section 179)
• ●Preserve working capital
• ●Competitive rates

3. Working Capital Loans Best for: Payroll, inventory, operations

• ●Cover seasonal gaps
• ●Fast approval
• ●Various term lengths
• ●Good for established restaurants

4. Business Line of Credit Best for: Ongoing cash flow management

• ●Draw only what you need
• ●Revolving access
• ●Lower cost than MCA
• ●Requires decent credit

5. SBA Loans Best for: Expansion, real estate, acquisition

• ●Lowest rates available
• ●Long terms (up to 25 years)
• ●Government backing
• ●Extensive requirements

Common Restaurant Funding Uses:

• ●Commercial kitchen equipment
• ●Walk-in coolers/freezers
• ●POS system upgrades
• ●Renovations
• ●Second location
• ●Franchise fees
• ●Outdoor seating
• ●Delivery infrastructure

Construction businesses have unique funding needs due to project-based revenue. Here's your guide:

Top Funding Options for Construction:

1. Invoice Financing / Factoring Best for: Bridging the payment gap

• ●Get paid immediately on completed work
• ●Don't wait 60-90 days for customer payment
• ●Based on customer credit, not yours
• ●Scales with project volume

2. Equipment Financing Best for: Heavy equipment purchases

• ●Excavators, trucks, tools
• ●Equipment as collateral
• ●Match loan to equipment life
• ●Tax advantages

3. Business Line of Credit Best for: Project-to-project gaps

• ●Draw for materials and payroll
• ●Repay when project pays
• ●Revolving access
• ●Only pay for what you use

4. Working Capital Loans Best for: Seasonal gaps, growth capital

• ●Cover winter slowdowns
• ●Fund bid deposits
• ●Handle payroll during slow periods

5. SBA Loans Best for: Major equipment, expansion

• ●Lowest rates
• ●Longer terms
• ●Government backing
• ●Requires strong financials

Construction-Specific Challenges:

• ●Long payment cycles (60-90+ days)
• ●Large material purchases upfront
• ●Seasonal work patterns
• ●Bonding requirements
• ●Progress billing complexity

Healthcare practices are viewed favorably by lenders. Here's your guide:

Why Healthcare Gets Good Terms:

• ●Stable, recession-resistant industry
• ●Predictable revenue (insurance)
• ●Professional ownership
• ●High barriers to entry
• ●Essential services

Top Funding Options:

1. SBA Loans Best for: Practice acquisition, real estate, major expansion

• ●Lowest rates available (Prime + 2.25-4.75%)
• ●Terms up to 25 years
• ●Healthcare is a preferred industry
• ●Requires strong documentation

2. Equipment Financing Best for: Medical equipment

• ●Imaging equipment ($100K-$1M+)
• ●Dental chairs and operatories
• ●Diagnostic tools
• ●EHR/technology systems

3. Practice Acquisition Loans Best for: Buying existing practice

• ●Specialized lenders understand practice valuation
• ●Can finance goodwill
• ●Often 100% financing available
• ●Terms: 7-10 years typical

4. Working Capital Best for: Managing reimbursement cycles

• ●Bridge insurance payment delays
• ●Cover payroll during transitions
• ●Fund marketing/growth

Healthcare-Specific Considerations:

• ●Insurance reimbursement timing
• ●Credentialing requirements
• ●HIPAA compliance costs
• ●Malpractice insurance
• ●Staff certification requirements

Trucking has specialized funding needs. Here's your complete guide:

Top Funding Options for Trucking:

1. Freight Factoring The industry standard for cash flow

• ●Factor invoices immediately after delivery
• ●Advance rate: 90-97% (highest in any industry)
• ●Don't wait 30-60 days for broker payment
• ●Fuel advances available

2. Equipment Financing For fleet expansion

• ●Trucks: $80K-$180K new
• ●Trailers: $20K-$60K
• ●Terms matched to useful life
• ●Equipment as collateral

3. Working Capital For operations

• ●Fuel costs
• ●Insurance premiums
• ●Driver pay
• ●Maintenance
• ●Permits and fees

4. Fuel Cards with Credit Specialized for trucking

• ●Credit line for fuel only
• ●Discounts at fuel networks
• ●Integrates with dispatch
• ●Easier qualification

Trucking-Specific Challenges:

• ●Fuel cost volatility
• ●Authority requirements
• ●Insurance costs
• ●Driver retention
• ●Equipment maintenance
• ●Regulatory compliance

What Lenders Evaluate:

• ●MC/DOT authority age
• ●Safety scores (CSA)
• ●Operating ratio
• ●Contract vs spot mix
• ●Insurance compliance
• ●Fleet age and condition

Restaurant equipment is expensive but essential. Here's how to finance it smartly:

Common Equipment Costs:

• ●Commercial oven: $5,000 - $30,000
• ●Walk-in cooler: $5,000 - $15,000
• ●Refrigeration: $2,000 - $10,000
• ●Dishwasher (commercial): $3,000 - $15,000
• ●POS system: $1,500 - $10,000
• ●Ice machine: $2,000 - $8,000
• ●Fryer: $1,500 - $5,000
• ●Full kitchen buildout: $50,000 - $200,000+

Equipment Financing Options:

Equipment Loan:

• ●Borrow to purchase equipment outright
• ●Equipment serves as collateral
• ●You own it after payoff
• ●Good for: New equipment with long useful life

Equipment Lease:

• ●Monthly payments to use equipment
• ●Options at lease end (buy, return, upgrade)
• ●Often includes maintenance
• ●Good for: Technology that becomes outdated

Typical Terms:

• ●Amount: $5,000 - $500,000
• ●Down payment: 0-20%
• ●Terms: 2-7 years
• ●Rates: 6-25% depending on credit

Tax Benefits: Section 179 deduction allows you to deduct the full purchase price in the year of purchase (up to limits). This can significantly reduce effective cost.

Tips for Restaurant Equipment Financing:

• ●Get multiple quotes for equipment
• ●Consider used/refurbished for some items
• ●Finance mission-critical items, pay cash for small items
• ●Match loan term to equipment useful life

Invoice factoring is a game-changer for contractors who wait months for payment.

How It Works:

1. ●Complete work and invoice customer
2. ●Submit invoice to factoring company
3. ●Receive 80-90% of invoice value immediately
4. ●Factor collects from your customer
5. ●Receive remaining balance minus fees

Construction Factoring Specifics:

Advance Rates:

• ●Progress billings: 70-85%
• ●Completed work: 80-90%
• ●Retainage: Usually not factorable until release

Typical Fees:

• ●2-4% for 30 days
• ●Additional 0.5-1% per 10 days after

Timeline:

• ●Initial setup: 3-7 days
• ●Subsequent invoices: 24-48 hours

What Can Be Factored:

• ●Progress billings (with proper documentation)
• ●Completed work invoices
• ●Change orders (approved)
• ●Materials on-site (sometimes)

What CAN'T Be Factored:

• ●Retainage (until released)
• ●Disputed amounts
• ●Residential work (some factors)
• ●Uncreditworthy customers

Benefits for Contractors:

• ●Fund next project without waiting
• ●Cover payroll between projects
• ●Take on larger projects
• ●Don't turn down work due to cash
• ●Based on customer credit, not yours

Choosing a Construction Factor: Look for:

• ●Construction industry experience
• ●Progress billing capability
• ●Notification vs non-notification options
• ●Reasonable advance rates
• ●No long-term contracts (ideally)

Heavy equipment is expensive but essential. Here's how to finance it:

Common Equipment Costs:

• ●Excavator: $100,000 - $500,000+
• ●Skid steer: $25,000 - $75,000
• ●Backhoe: $60,000 - $150,000
• ●Dump truck: $100,000 - $200,000
• ●Concrete truck: $150,000 - $250,000
• ●Crane: $200,000 - $1,000,000+
• ●Bulldozer: $75,000 - $200,000
• ●Compactor: $20,000 - $100,000

Financing Options:

Equipment Loan:

• ●Own the equipment after payoff
• ●Equipment as collateral
• ●Terms: 3-7 years
• ●Down payment: 0-20%

Equipment Lease:

• ●Operating lease: Return at end
• ●Capital lease: Own at end
• ●Often includes maintenance
• ●Better for rapidly depreciating equipment

New vs Used Equipment: New Equipment:

• ●Longer useful life
• ●Warranty coverage
• ●Better financing terms
• ●Higher initial cost

Used Equipment:

• ●Lower cost
• ●Faster depreciation (tax benefit)
• ●May need larger down payment
• ●Potential maintenance issues

Financing Tips for Contractors:

1. ●Match loan term to useful life
2. ●Consider seasonal payment structures
3. ●Get pre-approved before shopping
4. ●Factor in maintenance costs
5. ●Utilize Section 179 for tax deduction

What Lenders Evaluate:

• ●Time in business (2+ years preferred)
• ●Revenue stability
• ●Equipment type and age
• ●Down payment
• ●Credit score (600+ typical)
• ●Project pipeline

Dental practices have excellent funding options due to industry stability.

Common Dental Practice Funding Needs:

• ●Practice acquisition: $200K - $1.5M
• ●New operatory: $50K - $100K per chair
• ●Imaging equipment: $50K - $250K
• ●Office buildout: $100K - $500K
• ●Technology/software: $20K - $100K

Best Funding Options for Dentists:

1. Dental Practice Acquisition Loans

• ●Specialized lenders (Bank of America Practice Solutions, Live Oak, etc.)
• ●Up to 100% financing
• ●Terms: 7-12 years
• ●Include goodwill and intangibles

2. SBA Loans

• ●Lower rates than conventional
• ●Longer terms available
• ●Can combine multiple needs
• ●Extensive documentation required

3. Equipment Financing

• ●For chairs, imaging, technology
• ●Equipment as collateral
• ●Often 0% down available
• ●Quick approval (days not weeks)

4. Practice Line of Credit

• ●Ongoing working capital
• ●Cover insurance reimbursement delays
• ●Draw as needed

What Lenders Want to See:

• ●Dental license in good standing
• ●Practice financials (if buying existing)
• ●Personal financial statement
• ●Business plan (new practice)
• ●Patient volume projections
• ●Payer mix breakdown

Unique Dental Considerations:

• ●New graduate loans available
• ●DSO acquisition financing
• ●Multi-location strategies
• ●Associate buy-in structures

Freight factoring is essential for trucking cash flow. Here's how it works:

The Basics:

1. ●Deliver a load
2. ●Submit BOL and invoice to factor
3. ●Receive 90-97% within hours
4. ●Factor collects from broker/shipper
5. ●Receive remaining balance minus fee

Why Trucking Factoring is Different:

• ●Highest advance rates in any industry (90-97%)
• ●Same-day or next-day funding
• ●Fuel advance programs
• ●Load board integrations
• ●Credit checks on brokers

Factoring Fees:

• ●Flat fee: 1.5-5% per invoice
• ●Or tiered: 2% first 30 days + 0.5% per 10 days after
• ●Fuel advance fees: 2-3%

Types of Factoring:

Recourse:

• ●You're responsible if broker doesn't pay
• ●Lower fees (1.5-3%)
• ●More common

Non-Recourse:

• ●Factor assumes risk of non-payment
• ●Higher fees (3-5%)
• ●Limited protection (typically fraud only)

What to Look for in a Factor:

• ●No long-term contracts (or low minimums)
• ●High advance rate (95%+)
• ●Fuel advance program
• ●Good broker credit checking
• ●Quick funding (same-day)
• ●Reasonable fees

Fuel Advance Programs: Many factors offer fuel advances:

• ●Get 40-50% of load value at pickup
• ●Loaded on fuel card
• ●Deducted from final payment
• ●Keeps trucks moving

Inventory is the lifeblood of retail. Here's how to finance it:

Best Options for Inventory:

1. Business Line of Credit Best overall for inventory:

• ●Draw when ordering
• ●Repay as inventory sells
• ●Revolving—use again and again
• ●Only pay interest on what you use

2. Inventory Financing Specialized option:

• ●Inventory itself as collateral
• ●Revolving credit based on inventory value
• ●Common in retail, wholesale, distribution

3. Merchant Cash Advance For quick inventory needs:

• ●Fast funding (same day)
• ●Good for seasonal stock-up
• ●Higher cost but accessible

4. Trade Credit From suppliers:

• ●Net-30, 60, or 90 terms
• ●No interest if paid on time
• ●Build with payment history
• ●Ask vendors for extended terms

Seasonal Inventory Strategy:

Pre-Season:

• ●Apply for funding after last peak (strong statements)
• ●Draw for inventory 60-90 days before peak
• ●Stock early for best selection

During Peak:

• ●Repay from strong sales
• ●Don't take new debt during peak
• ●Build reserves

Post-Season:

• ●Clear excess inventory
• ●Pay down lines
• ●Prepare for next cycle

Calculating Inventory ROI: Before financing inventory, calculate:

• ●Gross margin on inventory
• ●Inventory turn rate
• ●Cost of financing

Example:

• ●$100K inventory at 45% margin = $45K gross profit
• ●Financing cost (MCA): $25K
• ●Net benefit: $20K

If your margin exceeds financing cost, it makes sense.

Staffing agencies face unique cash flow challenges. Here's how to solve them:

The Staffing Challenge:

• ●Pay employees weekly
• ●Get paid by clients in 30-60 days
• ●Gap can be 30-60 days of payroll
• ●Growth makes the gap worse

Best Funding Options:

1. Payroll Funding / Invoice Factoring Industry standard for staffing:

• ●Factor invoices immediately
• ●Get 85-95% of invoice value
• ●Pay employees on time
• ●Scale with your placements

2. Line of Credit For established agencies:

• ●Revolving access
• ●Lower cost than factoring
• ●Requires strong financials
• ●Good credit needed

3. Asset-Based Lending For larger agencies:

• ●Based on receivables value
• ●Higher advance rates than factoring
• ●More complex structure
• ●Lower cost at scale

Staffing Factoring Specifics:

Advance Rates:

• ●Temporary staffing: 85-92%
• ●Permanent placement: 70-80%
• ●Higher for established customers

Typical Fees:

• ●2-4% per invoice
• ●Volume discounts available
• ●May have minimums

What Factors Look For:

• ●Creditworthy clients
• ●Assignment confirmations
• ●Timekeeping systems
• ●Clear contracts

Growth Strategies:

1. ●Start with factoring to manage cash
2. ●Build reserves from profits
3. ●Add line of credit as financials strengthen
4. ●Eventually reduce factoring reliance

Most restaurants experience seasonal variations. Here's how to manage them:

Understanding Your Pattern: Map your cash flow:

• ●Peak months (holidays, summer, events)
• ●Slow months (January, weather-dependent)
• ●Transition periods

Funding Strategies by Season:

Before Peak Season:

• ●Stock up on inventory
• ●Hire/train seasonal staff
• ●Marketing push
• ●Equipment maintenance

Funding option: Line of credit or MCA timed to peak

During Peak Season:

• ●Build cash reserves
• ●Pay down debt
• ●Avoid taking new funding
• ●Save 15-20% of revenue for slow season

During Slow Season:

• ●Draw from reserves first
• ●Use line of credit for gaps
• ●MCA payments naturally lower
• ●Reduce variable costs

Best Products for Seasonal Restaurants:

Merchant Cash Advance: Why: Payments automatically decrease when sales drop

Business Line of Credit: Why: Draw during slow months, repay during peak

Revenue-Based Financing: Why: Payments flex with monthly revenue

Planning Ahead:

1. ●Apply for credit during peak season (best approval odds)
2. ●Have line of credit ready before slow season
3. ●Build 3-6 months operating reserve
4. ●Know your monthly minimum expenses

Industry-Specific Seasonal Patterns:

• ●Beach restaurants: Summer peak, winter slow
• ●Ski resorts: Winter peak, summer slow
• ●Outdoor dining: Weather-dependent
• ●Urban core: Business day patterns

Expanding to a second location is exciting but capital-intensive. Here's how to fund it:

Typical Expansion Costs:

• ●Build-out: $100,000 - $500,000
• ●Equipment: $50,000 - $200,000
• ●Initial inventory: $10,000 - $30,000
• ●Permits/licenses: $5,000 - $20,000
• ●Marketing launch: $10,000 - $50,000
• ●Working capital buffer: $50,000 - $100,000

Total: $225,000 - $900,000+

Best Funding Options for Expansion:

1. SBA 7(a) Loan

• ●Up to $5 million
• ●Rates: Prime + 2.25-4.75%
• ●Terms: Up to 25 years (real estate)
• ●Best for: Full expansion funding

2. SBA 504 Loan

• ●For real estate and fixed assets
• ●Low down payment (10%)
• ●Fixed rates
• ●Best for: Buying the building

3. Equipment Financing

• ●Fund equipment separately
• ●Preserve SBA for real estate
• ●Faster approval than SBA
• ●Best for: Kitchen buildout

4. Business Term Loan

• ●Faster than SBA
• ●Higher rates but less paperwork
• ●Good for proven operators
• ●Best for: Mid-size expansions

Expansion Funding Strategy:

1. ●Start SBA application early (takes 60-90 days)
2. ●Use equipment financing for immediate needs
3. ●Line of credit for working capital buffer
4. ●Don't underfund—include 3-6 month reserve

What Lenders Want to See:

• ●Profitable first location
• ●Strong management team
• ●Detailed business plan
• ●Market research for new location
• ●Clear path to profitability

Getting financing with new authority is challenging but possible.

The Reality:

• ●Under 6 months authority: Very limited options
• ●6-12 months: More options open up
• ●12-24 months: Standard financing available
• ●24+ months: Best rates and terms

Options for New Authority:

First 6 Months:

• ●Personal credit-based loans (if 700+ score)
• ●Lease-purchase programs (be very careful)
• ●Used truck financing with large down payment (30-50%)
• ●Family/personal loans

6-12 Months:

• ●Equipment financing from specialty lenders
• ●20-30% down payment typical
• ●Higher interest rates (15-25%)
• ●Shorter terms (3-4 years)

12+ Months:

• ●More competitive financing
• ●Lower down payments (10-20%)
• ●Better interest rates
• ●Longer terms available

Improving Your Odds:

Build Your Profile:

• ●Maintain clean CSA scores
• ●No insurance lapses
• ●Steady revenue growth
• ●Clean driving record

Strong Application:

• ●Large down payment
• ●Co-signer with good credit
• ●Proof of contracts/steady work
• ●Solid business plan

Lease-Purchase Warning: Be VERY careful with lease-purchase:

• ●Often predatory terms
• ●High total cost
• ●Walk-away penalties
• ●May never actually own truck
• ●Read EVERYTHING before signing