Restaurant Funding – Who Can You Turn to When the When Banks Say No?

restaurant fundingUnfortunately bank loan officers do not like to do restaurant financing! This year of 2008 is a very tough year, foreclosure rates the highest ever in the history of the United States, a credit crunch due to the mortgage crisis, lenders cherry picking their loans, even denying borrowers with good credit.

So as if the food and hospitality industry was not already difficult for getting restaurant loans, it is much more harder to get loans then ever before due to the recession that is happening currently around major cities in the united states, gas prices going off the roof creating a domino effect in many many industries, consumers not spending as much, going out less due to super high gas prices.

Restaurant failure is the main reason why bankers are Leary of lending money to a new start up restaurants, if the borrower applicant does not have a proven track record in the food and hospitality business.

Success for food service businesses is viewed by bankers as minimal. Their hesitation is due to higher failure rates in the industry for new restaurant owners with no experience opening a restaurant.

Designing A Restaurant

A good design and layout plan are necessary for having a good restaurant. Many entrepreneurs would say that their dream business will be to own their own restaurants. Restaurants are good businesses which can be very fulfilling. The mere fact that people go to your restaurant to eat is already something to cherish. It’s like having people inside your house every once in a while craving for your home-baked goodies.
restaurant design
A successful restaurant will need a good design and layout plan. Design and layout plans are dependent on different factors which will come and influence the final decisions later on. In fact, the output of the layout plans can definitely affect the success of the restaurants. People often go to a new restaurant and they think to themselves “they should have put that plant elsewhere, it obstructs the good view” or “I wish they hadn’t put too much light in here.” These are certain small things which can really add up and can end up influencing the customers to go to the other side of the street where another restaurant is calling their tummies.

After the type of food and service are identified, the next step is to hire consultants regarding the design of the restaurant. These are some of the things that you need to take into consideration when considering different floor and layout plans for the restaurant.

-Density of customers

The layout plan should be based mostly on the comfort that the people who will eat will be getting. Even fast food restaurants consider the density of people, especially in peak hours, even though it may seem that these restaurants become too crowded during lunch time. For formal dining restaurants which cater to the upper class, it maybe wise to provide more space between the tables since these restaurants don’t really rely on the number of people per day. Their revenues depend on the pricing of the food items. There would be more provision for more eye candies such as furniture and art works.

-Style of service

The layout and floor plans should also be based on the type of service that the restaurant will give. Fast food restaurants and self-service restaurants would need less distance between the tables since the food won’t be served there. For other restaurants which provide table service, the space between the tables is very important so as to prevent too much clutter from happening in a specific end of the restaurant.

-Type of building

The layout plan is restricted by the type of structure where the restaurant will be built. You should be able to take into consideration all the different curves and the minor details in the structure before proceeding.


Proper lighting is very important for every restaurant. The lighting should be able to match the mood and the type of service of the restaurant. A relaxed atmosphere can be complemented by bright lighting while serene and serious moods can be accompanied by subtler shades.

Designing the restaurant will be divided into two important parts: the dining area and the production area. The dining area is important because this is the essence of the structure of the restaurant. The people should be comfortable in eating in the restaurant and this will be determined as early as the designing phase. Studies have revealed that 50 percent of the time, people come in restaurants as pairs, 30 percent come alone while the remaining 20 percent usually come in groups.

The production area is the second major part of any restaurant. The main thing about the production area should be efficiency. The organization of the kitchen will determine the speed by which the food can be cooked and served. The production area design should take into consideration other things like space for storage, food preparation, baking, cooking, trash storage, production aisles, employee facilities and other such matters.

In hiring design consultants, the restaurant owner should always remember to put a clause of confidentiality in the contract. This is to prevent the consultants from leaking certain parts of the design to other people, especially to the competitors. This can be as simple as a single-line clause which states that everything regarding the design will be owned by the client.

These are some useful things to remember in designing. The most important thing to remember in designing a restaurant is to keep in mind the people who will be eating at the restaurant for they will be the ultimate lever of its success or failure.

Types of Restaurant

Many entrepreneurs are thinking about putting up their own restaurants. Restaurants are generally seen as good business ventures because people are always looking for food. There are different types of restaurants that businessmen can look into starting up and the decision regarding what type of restaurant or what style to put up is based on different types

The decision regarding the general concept of a restaurant business will be dependent on different major things. Listed below are some of these factors:


The style of the restaurant will be dependent on the location of the restaurant. For example, if someone is thinking about putting up a Chinese-style restaurant in a place where this type of restaurant abounds. He might want to tweak some details about his restaurant to be able to have a competitive advantage against the other Chinese restaurants in the area. Perhaps he would stick with the general concept of having a Chinese restaurant because the place is popular for this type of food but he might want to add different types of cuisine as well, perhaps go into fusion cooking.

Target Market

The target market is very important in determining what style of restaurant to put up. A busy place where class B society thrives maybe an optimum location to put up a midscale fast food restaurant. Different restaurants cater to different types of people and no one restaurant aims at capturing the whole of the market because it would just end up in confusion.

Availability of Materials

If a person is thinking of putting up a restaurant, he might want to look closely at the availability of the materials in the area. For example, a seafood restaurant will depend greatly on the availability of fresh ingredients and seafood in the local market. If not, the owner will have to look for other alternatives which can cost him additional money.

Availability of good cooks

There are more than enough restaurants in many areas today. The only thing that separates the good ones from the normal ones are the types of cooks. The style of the restaurant should match the skills of the hired chef. There are good chefs who can easily adjust to styles which they aren’t really accommodated with but these chefs are very hard to find and perhaps, they will ask for a very hefty salary.

Personal Preference

Of course, every business is built upon vision and the personal preference of the owner will ultimately determine the style of restaurant that he will start. There are ways to beat the normal odds which go against the success of new restaurants.