How Financing Is An Essential Element While Establishing Your Restaurant

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Owning a restaurant is perhaps a lifelong dream for people who are passionate for a career in this food industry.
  • Shahram Warsi
Restaurant India

With the demand for food rising every day, this industry now has a lot to offer to people who really want to invest in this field and to do something out of it. So this is the time to step in this business.

Whatever your reason be for opening a new restaurant, finding the right amount of financing and financiers is always a challenge. According to Zeenat Ahsan, Co-owner, Bohemia Café, “Financing is one of the prior things a person should think of before stepping on the second step towards opening your restaurant. Financing decides how your venture is going to be after it’s established.”


The first step should be finding investors for your idea and concept. Investors provide with the required money to open your restaurant. One of the most common types of investment found in process of opening a restaurant-- when a person with a lot of money is interested in investing in your business with a little profit. But it is necessary to ensure that you will be able to pay it back. Before opting for investors, it is absolutely essential to make a business plan about how to repay the investors and create a timeline for your activity.

Loan from family and friends

It is very important to know your friends and family’s opinion before establishing a venture. They always play a helping hand by contributing to your idea. These people know you and are most likely to believe in you and your business model. But you should be careful while doing so because usually, these things can ruin your relationship. It is very important to spell out the parameters in writing and is agreed by all the parties.  

Bank loans

Most restauranteurs get their financing through a bank loan. It is one of the easy yet challenging method as most banks are leery of restaurants due to their high failure rate. Small Business Loans come very handy when you are financing through a bank for the first time. “Financing through your bank is one of the best ways while opening a venture of your own. Banks usually provide with the amount of money required after proper documentation, allowing you enough time to pay them back on a fixed interest rate,” shares Vedant Goyal, Owner, Threads Café.

Opening a restaurant isn’t an easy task. You need to have a great menu and superb customer service managing the costs alongside. Many of the people fail in securing their financing as they didn’t know accurately what their needs were. So it’s very important to come up with a business plan before moving towards financing for your restaurant.

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3 Ways to Get Financing for Your Restaurant
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