Hello current and prospective street food owners, we are going basic this week and we hope that our message cuts across and teaches you something that could move your business forward. We are going to be talking about street food shop financing especially for prospective owners who are yet to figure out how to make the funding work out. The already established food shop owners could also take a cue about funding from this digest.
The street food business is quite a lucrative one; you must have heard this from so many people. You are told about the massive gain and the ease and the need for hard work if you want to stay afloat. What barely anyone tells you is how you can raise a street food business capital.
How To Raise Funding For Your Street Food Business
The first step to garnering funding for your food business is making an effort. This important step is required in all businesses and the street food business is not left out. If your dream must come true, you’d have to take an action. Are there financial organizations you can get loans from? Even if you are afraid of being rejected, you can employ the help of another credit worthy person who understands how passionate you are about your dream. A cosigner should not be your only option while in your funding journey. You should save up too being that loans are sometimes not enough. You could already make ready some of your priced possessions to put up as collateral for loans. This will help you secure a loan faster because organizations only put in money where they hope to get it back.
Option #1. Term Loans.
To begin with, there are Term Loans which you could take on. Student loans and car loans are also sort of term loans. Here, the lender gives you an amount of money which you pay back within a period of time. The terms of this loan are determined by what you need the loan for and your agreement with the lender. Some loans are repaid on bi-weekly, monthly or yearly basis; it all depends on your agreement with the lender.
Term loans can solve a range of issues for owners of young food shops. It can cover getting extra food supplies, the hiring of a few more temporary staff, amongst other needs. While term loans are savers, there are certain downsides to them. The online lenders are usually more convenient but may have higher interest rates. A physical bank may give you a longer period of time to pay back an amount of money as opposed to the duration an online lender would give. Term loans offer lots of advantages but should not be the only borrowing option open to a new food business owner.
Option #2. Merchant Cash Advance
Another option is the Merchant Cash Advance. Here, it is not exactly a loan but an advance on the future sales of your shop. You are provided with the funding quite fast without collateral and you pay back daily with a percentage of the daily debits and credits at your shop. This option may cut across as expensive for some food shop owners.
Option #3. Inventory Financing
The Inventory Financing is offered specifically for inventory purchases. This has a short term repayment and is fit for food shop owners who are in seasonal businesses. The interest rates for this may be too high for a young business and may jeopardize a food shop’s assets if they do not pay according to the terms of the agreements.
Option #4. Small Business Administration Loans
The next option is the Small Business Administration Loans. This program offers funding for food shops and other businesses. This loan option has great interest rates and offers reasonable repayment duration. The con for this option is the delay in securing a funding and the percentage of down payment which may not be available in your business profits at the time of demand.
There are funding opportunities for businesses in and around your community. So to get the best, you should make detailed enquiry before making a choice. Be sure that you understand the terms and conditions of a funding, the rates and fees before agreeing to work with them.
We wish you the best as you make efforts towards advancing your dream of owning a street food shop.
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