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National Restaurant Association - Panel offers small-business lending suggestions

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Panel offers small-business lending suggestions

Restaurateurs eligible for financing from the Small Business Administration or other government-backed lenders should take advantage of those loan programs, a panel of small-business lending experts said Sunday.

The panel discussion was one of more than 70 educational sessions at the National Restaurant Association Restaurant, Hotel-Motel Show in Chicago. The NRA Show runs through Tuesday.

The SBA is a good alternative for operators who don’t have a great “track record or a lot of collateral,” said Judith Roussel of the SBA. The agency helps business operators “access the three Cs: counseling, capital and vital contracts necessary to grow a business, she said.

The agency's most popular loans fall under two categories: the flagship 7(A) and 504 programs. Those loans can range from as little as $50,000 to $5 million.

Jane Butler of the Association of Government Guaranteed Lenders said small business owners should remember their primary relationship is with the bank because the SBA doesn't lend directly. The best way to secure a loan is to establish a relationship with a local lender, she said. "You’ll have better luck getting a loan from those who know you.”

Joyce Mazero of law firm Haynes and Boone LLP said prospective borrowers should explore alternative financing such and private equity firms and online lending outfits. She emphasized that restaurant operators seeking financing should make sure their lenders are educated about the restaurant industry.

“You have to be creative and educate the lender,” she said. “The economy still is not that great and the risk for failure is still out there. One way is to … think a little differently — tell the lender a story that is persuasive and educational.”

She added that the SBA should make available a list of lenders who cater specifically to the needs of restaurant operators.

“It would be fabulous if the SBA culled data and let us know who’s doing the most loans in the industry,” she said. “That would be most helpful.”

 

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