Finance for your Restaurant, Takeaway or Cafe
Running a food business can take a surprising large investment. We can help find the funding solutions you needSpeak to one of our experts020 4525 5312
- Commercial mortgages from 2% above base rate
- Lease deposit loans
- Secured loans - £250,000 or more from 2% above base rate
- Fit out and refurbishment funding
- 'Jigsaw' funding designed around your needs
- Unsecured loans up to £25,000 from 4.9%
- HP up to 60 months from 6%
- Equipment Lease - with no capital costs
- Cashflow support
- Merchant cash advances
- Working capital loans
- Tax loans
Running any kind of catering business, be it a restaurant, takeaway or cafe means hard work and demands dedication and skills. But it can mean substantial financial rewards.
All the information you need
Those rewards depend on many factors - but underlying them all is the level of investment you can make in your business.
You need premises in the right location. You need the right menu, price, and overall service experience your customers expect. You need equipment, fittings staff and marketing. If you can find a way to deal with the costs, you could well be running a lucrative business.
What type of business?
There are several styles of business to consider:
A restaurant offers seated dining. This can range from upmarket silver service to busy functional eateries designed for busy lunchtime workers. Finding a top chef may be essential for a successful restaurant, although costs, speed and volume may be more important for the lunchtime business. Restaurants may also offer specialist cuisines.
A café serves coffee and various forms of food – and can offer seated, as well as takeaway, service. Brits now drink around 55 million cups of coffee per day and the café culture is flourishing, with 80% of people who visit coffee shops doing so at least once a week. Margins are high, but unit pricing is low - you'll need lots of customers to make your coffee shop a success.
A takeaway prepares food that people collect and eat off the premises. A takeaway restaurant also has the option to eat the same food in a restaurant or cafe environment. Many takeaways specialise in a particular menu type, such as Indian or Chinese cuisines.
Of course, whatever style of business you choose you will face some financial challenges.
At Rangewell, we understand those challenges, because we work with restaurateurs across the UK, from those with Michelin starred restaurants to fast food franchises. We understand those challenges you face, and we have an expert team who can help find the solutions to them.
We can work with you to understand your finance needs, and to find the most appropriate solution from the many types available.
Funding options for your catering business
Getting the right kind of finance is essential. Buying premises or a going concern, equipping or refurbishment all present different funding needs. You may need to remodel your interior and re-equip your kitchen. You may even need to refit your interior.
The first step in securing the funding you need is simply to understand the different types of finance available.
- Funding for property
- Funding for buying a business
- Business loans
- Asset finance - Leasing and Hire Purchase
- Franchise funding
- Cashflow funding
- Tax funding
Funding to buy an existing business
Whether you are buying into an existing restaurant or catering business as a partner, or buying it outright, you will have some substantial costs to consider. The profitability of the existing business, the location and the potential profits and the ongoing costs of staff and overheads will all need to be taken into consideration.
However, although costs may be high, buying an existing restaurant or catering business can present less of a risk, as the costs and profitability can be clearly predicted. This predictability means that lenders may be prepared to offer a number of solutions to help you acquire the business.
Loans are the best-known forms of business finance and can provide answers to many different needs when you are buying a business, or looking to invest in one you already have, for example, to refurbish your kitchen or extend your dining area. There are two main types of loans.
Secured loans are often used to borrow large sums of money, upwards of £250,000. They are ‘secured’ because the lender will require security in case you cannot pay the loan back. This could be your home, or your premises if you are the freeholder.
You can have longer to repay than other types of loan, plus enjoy lower interest rates, meaning monthly repayments can be easier to fit in with your cashflow.
A Secured Loan could provide for major remodelling and extension of your premises.
Unsecured Loans can be suitable for smaller sums, from £5000 upwards - although some lenders will not let you borrow more than one month’s turnover with an unsecured loan. Some lenders can arrange Unsecured lending within one working day, and although you will not need to put forward any assets as security against the loan, you will need to provide a Personal Guarantee.
Unsecured loans have a maximum term of 5 years.
An Unsecured Loan could provide the funds for fitting out a dining area, or to refurbish a bar.
See how we can help you find the most cost-effective funding to buy a catering business.
Funding for property
If you are planning a new business, you may need to start with securing a property. Whatever type of catering you plan to offer, the right location is important There’s no point, for example, offering a sandwich delivery service in a residential area or an upmarket restaurant in an industrial zone. If you already have a location, make sure your product is a good fit for your catchment area. For example, if you are considering trading in an industrial area, your target market will be office and other workers.
You can lease property and, at Rangewell, we can help you find the best way to provide the deposit you need to secure the premises you want.
You might also consider buying premises for your business. There are some important advantages to buying. You can ensure your business is safe against rent rises, and build up a valuable asset for the future.
Commercial Mortgages can be used to buy business premises or an existing business. A lending manager will look at each application and will set the rate according to the risk. You may need a detailed business plan - the better your business proposition, the better the rates you are likely to be offered.
Bridging Finance is used to provide short term access to large sums of money. It can provide fast access to funds for buying a property at auction, until a renovation is completed or waiting for a mortgage to be approved.
Commercial Property Finance is arranged on an individual basis.
As an independent café or takeaway, you may face stiff competition from the major chains. A franchise from one of the leading names in the sector could reduce the risks, let you offer a familiar brand and provide support with marketing and buying, while still allowing you to be your own boss.
At Rangewell we are experts in helping all kinds of UK businesses find the funding they need to take up and run franchised operations.
See how we could put a catering franchise in your reach.
Asset Finance - Leasing and Hire Purchase
Your catering business requires a wide range of equipment. Your kitchen will need ovens, ranges, refrigeration and ventilation, and your dining area will need furnishing. You may also need vehicles for delivery.
Asset Finance lets you spread the cost of equipment - or assets - while those assets are already working for you. There are several types of Asset Finance:
Hire Purchase lets you hire assets until you have paid for them. It can be the simple way to spread the cost of items - such as a restaurant oven or seating – that you expect to give long service and will want to keep for the long term.
HP agreements generally last between 12 and 72 months and require a 10-20% deposit plus fixed monthly instalments.
Leasing is much like a rental agreement, where you pay a monthly charge to use the asset. With some arrangements maintenance, repairs and registration will be the owner’s responsibility, giving you the asset without any of the costs of ownership.
It’s common for things such refrigeration equipment, which will have a limited life – it means you can easily update your equipment when you need to.
Refinance Existing Assets
Your catering business has money tied up in assets. Asset Refinance lets you use that money to fund your business, while still having full use of your assets. The finance company will buy the asset from you, providing you with the cash sum you need. They then let you buy the asset back from them, with a new finance arrangement.
You can use your cash again, or reduce your monthly outgoings. Find out more here.
Cashflow is a major challenge for every business, and it can be crucial to the survival of your catering business. If your trade is seasonal, cashflow can become a problem in your down season – but there are ways to help.
Revolving Credit Facilities
Revolving Credit Facilities bring a line of credit, with an agreed limit that you can call on when you need it. You only pay for the money you take out, so it can be a cost-effective way to raise funds if you need them in an emergency, or for the short term.
Merchant Cash Advances
Merchant Cash Advances may be ideal if you take payments through a card terminal or PDQ machine. The lender works with your payment company and can advance you the equivalent of up to one month’s turnover, which is repaid by automatically deducting a proportion of the payment every time that a customer pays by card.
We can work with you to help you find the finance you need to smooth your cashflow.
Quarterly VAT or annual tax demands can cause a major drain on your cash flow. Tax Loans help you to spread the cost of your tax demands into affordable monthly payments, giving you:
- Better control of cash flow
- Predictable monthly payments
- Quick and simple to arrange
- Avoids penalties
Find out how a Tax Loan could support smooth cashflow.
How we help you capitalise your catering business
At Rangewell we work across the entire lending industry, and we have finance experts with personal experience in the needs of the restaurant, cafe and takeaway sectors.
That means we can provide a unique service. We will help you to find the most appropriate funding from lenders across the market – from established high street banks to alternative funding suppliers. We offer every type of finance including Unsecured and Secured Loans, Invoice Finance, Asset Finance, Merchant Cash Advance, Commercial Mortgages, Bridge Loans, Property Development Finance, Growth Finance and more.
We know the lenders who understand the needs of the catering industry and the most competitive rates for all types of lending. We can provide access to funders specialised in the sector, offering discounted rates, higher LTV’s and potentially lending on 100% goodwill.
Our promise is simple, We can help you cut the cost of investing in and running your catering business, including:
- Finance for fish and chip shops and takeaways
- finance for mobile food businesses
- finance for pop up food businesses
- finance for pop up restaurants
Call us to discuss your needs.
REAL EXAMPLES OF WHAT WE CAN DO
Find the most competitive funding to allow a new restaurant to equip its kitchen
Source a commercial mortgage to let a leaseholder buy the freehold of his city centre restaurant
Find the most competitive finance to allowa cafe operator to open new outlet in an upmarket riverside development
Find funding for equipment that undercuts the 0% deals offered by dealers
Help a takeaway fund the purchase of a fleet of mopeds for deliveries
Discover our range of finances
Every type of finance for every type of business
Our goal is very simple - to help businesses find the right type of finance as quickly, transparently and painlessly as possible.
Helping you build your profits
Tailored fundingThere are many types of business finance available. We can help you find the type that suits your business needs.
Repayments that can fit your operating budgetWhatever the scale of your business, we can find finance with repayments scaled to your turnover.
Scaled for your businessWe can provide finance at any scale, from a single piece of kitchen equipment to a complete, start-of-the-art catering facility with refrigeration, environmental and cooking facilities.
Funding is secured on the assets themselvesAsset funding avoids risk to your other assets. If you found the repayments became a problem, the lender could simply repossess the equipment.
Funding for all types of equipmentAsset funding can cover virtually any type of equipment used in your catering business. A single arrangement can cover items from multiple suppliers.
Better than 0% supplier financeSome suppliers may offer 0% finance deals on their equipment. Call Rangewell to understand how we can help you pay less than with these ‘interest-free’ deals.
Download Rangewell’s free and detailed guide to Finance for the Catering Industry
What types of finance are there for the hospitality indostry and which do you need?
How can Asset Finance help your hospitality business set up for the long-term?
Why not all lenders are equal and why it's important to find the one that is right for your business
Better financial management - How you can pay less that 0% for equipment and vehicles
Are there any downsides to finance and how can you avoid them?
Do my finance and accounting records need to be presented to lenders?
What paperwork you will need to prepare
Key terms explained