In this economy, it is very commonplace to seek the need for capital, especially for those in the competitive restaurant industry. Credit cards can be a very short-lived and expensive way to obtain cash. SBA loans (Small Business Association loans) are the ideal way to get the capital you need. According to their site, “Small Business Administration has delivered millions of loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses. SBA provides assistances primarily through its four programmatic functions:”
Recently there have been revisions in the SBA code in conjuction with The Jobs Act that will make it easier for independent restaurant owners and franchisees to qualify. One requirement is that these operators earn below a certain amount of revenue.
For example, limited-service restaurants can earn $10 million and still be able to qualify for SBA assistance – this is a $3 million increase from the previous $7 million. The upper limit for food contractors was also raised to $35.5 million.
According to SBA.gov, The Jobs Act will greatly support entrepreneurs and small business owners in the following ways:
New Law Puts More Capital in the Hands of Entrepreneurs and Small Business Owners
· SBA Enhanced Loan Provisions – more than $12 billion in lending support
· SBA loan provisions, with the 90% guarantee and reduced fees, were extended through 2010. The $505 million in subsidy for Jobs Act loans supported more than $12 billion in overall small business lending.
· According to self-reported data, a significant share of Jobs Act loans went to rural (22%), minority-owned (21%), women-owned (16%) and veteran-owned (7%) businesses.
· Higher Loan Limits – increased maximum loan sizes in top loan programs
· The law permanently increased 7(a) and 504 limits from $2 million to $5 million (for manufacturers in 504 loan program, up to $5.5 million).
· The law permanently increased microloan limits from $35,000 to $50,000, helping more entrepreneurs with start-up costs and small business owners in underserved communities.
· The law temporarily increased the maximum amount of quick-turnaround SBA Express loans from $350,000 to $1 million (expires 9/27/2011).
You can see the great opportunities this new revision has opened up to many businesses in need. To improve your chances of qualifying, it is crucial that your restaurant have a thorough and sound business plan – you must present as a worthy candidate. Our team specializes in creating restaurant business plans that are comprehensive in each area of your foodservice business.