Catering Financing 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.
It’s worth considering applying for catering business loans if you want to start a successful catering business.
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.
Catering is a competitive industry and 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
If you need a business loan for catering, you have a few different options, but all have advantages and disadvantages.
Large banks or credit unions traditionally provide term loans to small businesses. You repay the loan with regular repayments at a fixed interest rate, and you receive a lump sum. Small business loans are a great way to get working capital instantly. In order to qualify for a traditional loan, you typically need a credit score of 670 or higher.
Taking out a business line of credit, which works like a business credit card, is a common catering funding strategy. You will only pay interest on the amount of money you borrow, and you can borrow as much as you want. You don’t pay interest if you’re on funds you do not consume.
Unlike most loans, invoice financing works differently for small businesses. You will get money from lenders based on invoices you have issued to clients. As an example, if you have $10,000 worth of invoices that are waiting for payment from your customers, you can get it as a short-term loan. Paying staff and vendors right away while waiting for customers to pay their bills is possible with this quick type of finance.
The cost of this equipment makes it difficult to start a catering business. Here is where an equipment loan comes in handy. Loans for equipment are designed to help business owners purchase the machinery and equipment they need. Catering businesses require a lot of equipment such as commercial ovens, refrigerators and walk in freezers, etc.
One way to finance your catering business is through SBA loans. Due to their non-bank origin, these loans are highly sought after. The flexible payment plans and low interest rates make this type of loan popular among small business owners.
Small business cash advances are one of the easiest and most convenient ways to fund your catering operation. Instead of paying a percentage on your loan over time, you pay a percentage of your future sales. If your catering business is profitable, these cash advances work more like a royalty deal than a business loan. MCA offers merchant cash advances for those with a minimum credit score of 500.
How to Qualify for Catering Business Loans
A catering business loan requires a decent credit score, substantial collateral or income to prove you can repay the loan.
There are also some general rules, such as a loan age requirement. 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
A detailed business plan also never hurts to explain how you intend to spend the loan with interest.
Catering Business Loan Advantages
Taking out a loan to start a mobile catering business has many advantages. The right loan will give you immediate access to large amounts of working capital, which is crucial to launching your business.
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. You might even have to put up collateral, such as your home or vehicle, if you have poor credit.
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 now at mCashAdvance™ 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 is highly dependent on the type of funding you receive. As an example, SBA loans and traditional small business term loans can take up to six or seven months to process. Once approved, a merchant cash advance can reach your bank account within 24 hours.
Collateral is not required for all catering business loans, but if you have bad credit, it may be required. SBA loans will always ask for collateral, while merchant cash advances rarely do, if ever.
Yes, without a doubt! Planning out your catering business well and obtaining enough funds can make your business profitable. Catering profits should range from 10% to 15%, far exceeding 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. Businesses are different sizes and have different requirements. But most companies with fewer than 500 employees can qualify for SBA status.
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 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.
Catering is not one of those businesses that can expand and acquire equipment over time. In order to be successful and satisfy your clients, you need all your machinery and staff upfront.
Contact mCashAdvance™ today to learn more about starting a catering business loan.
Does Your Business Need Funding Today?
There’s no fee or obligation, and it won’t impact your credit.
$5,000 – $1,000,000
Talk to a rep at (855) 433-8641
Mon – Fri | 9:00am – 8:00pm