Are some of the financial products on the market significantly better than other?

The reason that bank financing is so difficult to obtain is that restaurants are a very risky investment for the bank to carry in its portfolio. The restaurant industry is highly competitive and more and more often the competition includes deep-pocketed corporations. Many other financing products are available but the costs are usually quite high, so while these products may be necessary at times, it is far better to have long-term funding set up in advance. If it is determined that a short-term need exists, then consideration must be given as to whether it is only the funds that are needed, or does the potential for new customers exist?

Naturally, the cost must be analyzed and considered and, most importantly, consider the payback period. There are also some products such as equipment leasing that could possibly offer better terms and be more affordable than other types of financing. Each situation may lead to a different solution.

The information given is provided for general, non-specific educational purposes only, and should not be relied upon as advice relating to your specific circumstances. For company-specific advice, consult directly with your tax advisor.

James Conniff is the Managing Partner at Bacall & Conniff, P.C., a full service CPA firm that provides industry specific accounting solutions for restaurateurs. Their services include: Weekly flash reports, Monthly financial statements, Web-accounting, Optional bookkeeping & payroll services, and Comprehensive tax & advisory services. They can be reached at 617-367-3250.

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