Catering Business Loans up to $300,000
Interested in catering business loans? We’ve helped thousands of caterers get access to funding. We can approve you for up to $300,000 within 1 business day. Find out if you qualify instantly with no obligations, no impact on your credit score, and no fees.
If you’re ready to start a successful journey as a caterer, you should consider applying for catering business loans.
Many catering business loans can work for different business owners. Consider this your complete guide to getting a loan for your catering business so you can have access to more cash flow and start creating delicious food and turning a profit.
What Are Catering Business Loans?
Catering business loans consist of bank loans, cash advances, or other types of financing that help caterers get their businesses started so they can be successful.
The catering industry is quite competitive, and a catering business requires a lot of equipment for prepping, cooking, and cleaning food.
What Can Catering Business Loans Be Used For?
Many expenses come along with starting a catering business. A business loan or cash advance can be essential in getting your commercial kitchen set up, attaining the permits, license, and certifications needed to serve and transport food, investing in a vehicle, or onboarding a staff.
These steps are all necessary for a catering business before making money. If you don’t have other income from a hefty savings account to dip into, a loan is an excellent option to get started.
Types of Funding for Catering Businesses
There are a few different options when you need a business loan for catering, but all have advantages and disadvantages.
Traditional small business term loans are loans paid out by large banks or credit unions. They come in a lump sum, and you pay the loan back with regular repayments at a fixed interest rate. Small business loans are excellent for a catering company because there will be many upfront costs, and you’ll want most of your working capital immediately. Unfortunately, traditional loans typically require a credit score of 670 or more to get approved.
A common catering funding practice is to take out a business line of credit, which works like business credit cards. You’ll only pay interest on the money you borrow and will have flexibility in how much money you have access to. The catering business can be unpredictable, and a business line of credit means you won’t be paying interest if you aren’t spending money.
Invoice financing is another option for small businesses that work differently than most loans. A bank will give you money based on invoices you have issued to clients. For example, if you have $10,000 worth of invoices waiting on customer payment, you can get this money as a short-term loan. This quick loan allows you to pay staff and vendors right away while you wait for customers to pay their bills.
It is hard to start catering without this expensive equipment. This step is where an equipment loan can be helpful. An equipment loan specifically helps a business owner purchase the necessary machinery and equipment they need. When starting up a catering business, you’ll need a lot of equipment like commercial ovens, commercial refrigerators, walk-in freezers, and more.
SBA loans or Small Business Administration loans are one way to fund your catering business. These loans are highly sought-after because they do not come from large banks or government entities. In addition, many small business owners prefer this kind of loan because the interest rates are low and the payment plans are flexible.
small business cash advance loans are among the best and easiest ways to fund your catering business. Rather than pay a percentage on your loan over time, you pay a percentage or portion of your future sales. These cash advances work more like a royalty deal than a business loan and work excellently if your small catering business is profitable. MCA offers merchant cash advances for those with a minimum credit score of 500.
How to Qualify for Catering Business Loans
To get a loan for catering businesses, you’ll need to have a decent credit history and a good credit score or have substantial collateral to put up or income to imply you can make the repayments.
There are also some general rules, such as a loan age requirement because you can be too young, but you can also be too old. There is no guarantee you will receive a business loan until you apply and receive approval.
To qualify for a catering business loan, you will need the following:
- Tax returns
- Financial statements
- Debt schedules
- Personal financial statement
It also never hurts to have a detailed business plan to exemplify how you will spend the loan and how you will get a decent return to pay interest or other expenses associated with the loan or advance.
Catering Business Loan Advantages
There are many advantages to taking out loans to start a mobile catering business. First, taking out the right loan will immediately give you access to large amounts of working capital which is crucial when getting your business up and running.
Another advantage is the variety of loans available to caterers, as discussed above. Many loan options fit your catering business needs, from invoice financing to lower interest rates to equipment financing.
Catering Business Loan Disadvantages
Unfortunately, many disadvantages come with a loan for a catering business. Banks and lenders prefer you to be an established entity to get loans other than the SBA loans, so they take a minimal risk. This requirement can make it challenging to get a loan, especially if you also have bad credit.
Credit is a huge factor in qualifying for a catering business loan, as well as the rates you’ll be subject to. If you have poor credit, they may even ask you to put up collateral like your home or vehicle, making the loan much riskier for you.
Many loans have a lengthy list of prerequisites you must meet to qualify. It can be impossible to get a catering business loan if you don’t check all the right boxes the banks and lenders consider.
How to Apply for the Best Catering Business Funding
Read on and apply today for funding for your catering business!
Eligibility Requirements
To be approved by mCashAdvance™, you must meet the following requirements:
- U.S. citizens and legal residents only
- 18 years old or older
- Catering companies must be at least six months old
- A credit score of 500 or higher is required
Funding Limits
In order to be eligible to receive funding, the financial health of your company should be considered, but you may be eligible for up to $500K.
Term Length
Typically, repayment periods range from 1 to 5 years. This may vary depending on the amount funded and retail sales volume.
Catering Business Loans: Frequently Asked Questions
Yes, it can be challenging to get loans to start a mobile catering business if your credit score is low or nonexistent. In this case, you can put up collateral, take a high-interest rate, or opt for a merchant cash advance, which doesn’t care as much about your credit.
The answer to this question depends heavily on what kind of funding you decide to get. For example, an SBA loan or a traditional small business term loan can take up to six or seven months to be approved and received. But on the other hand, a merchant cash advance can reach your bank account in as little as 24 hours once you’re approved.
Collateral is not required for all catering business loans, but there is a likely chance you’ll need to put up collateral if you have low credit or no business history. SBA loans will always ask for collateral, while merchant cash advances rarely do, if ever.
Yes, absolutely! Catering services can be super profitable if you plan out your business well and attain suitable funds. Net profits from catering should be between 10% and 15%, far more than the 4% expected in restaurants.
As long as you are small enough to fit the SBA’s definition of a small business, your catering business can qualify. The qualifications for being a small or micro business are complex, but most companies with less than 500 employees can be considered small businesses by the SBA.
Funding Your Business Is Our Business
Catering Business Loans Can Strengthen Your Business
Starting a whole new business on your own can be daunting and challenging. Getting catering business loans can give you a massive leg up when you’re just starting your business.
Taking out catering business loans will start you off on the right foot for success. Whether you opt for an SBA loan, invoice financing, or a merchant cash advance, having some extra capital or flow of income will help you keep up with demand and maintain your kitchen, transportation, and serving equipment.
Some businesses can grow slowly and acquire equipment over time, but catering is not one of the businesses. You need to have all of your machinery and staff upfront to be successful and make clients happy!
Contact us today to learn more about starting a catering business loan.
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to Hold your Business Back
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