Small Restaurant Business Loan in Riverside California

This restaurant business loan is from Riverside, California. The applicant has experience in the restaurant industry and wants open this Steak and Lobster restaurant in Murrieta Hot Springs which the exact duplicate of another restaurant his Uncle owns and operates in the Riverside County area of California. He (like most prospective business owners and borrowers) is very excited about opening this restaurant, and seem to have done his homework – however, you will notice there is an issue with collateral and the lack of any major form of security. The borrower mentions that his wife will give him down payment of around $10,000 dollars, and if that is the case, it may help him get approved.

You can read the particulars of this small business applicant, and then we see the full extent of the loan in dollars and sense.

Type of Loan :: Restaurant Business Loan

Why do you need a loan? :: This loan will be put into the restaurant that I am opening up.  I am currently working with two other partners on this project.  One of my partners already owns a successful Steak and Lobster restaurant in Temecula, CA.  He would like to open a sister restaurant but would also like some help into doing so.

I have been in the restaurant industry for 6 years now.  I have been part of a restaurant that has failed and restaurants that have been very successful.  I would like to take the next step in my life.  This loan would help me put my share of start up capital into the business.

If for Business, tell us a little about your business – All info is secure! :: This restaurant will be a Steak and Lobster restaurant as well.  It will be a smaller venue than your typical Black Agnus franchise, to give the lenders some idea of what our floor space will be like.  The location that we have chosen is Murrieta Hot Springs, Ca, near the Rancho California Country Club.  Advertising will come easier than most because of the name my partner has built.  The menu items will be somewhat similar but different.  Since its going to be a smaller venue we have decided to simplify the menu since storage space is also limited.

How Much Do You Want To Borrow? :: Between $50K – $60K

Length of Employment :: Over 5 Years

Time at Address :: Between 3 – 5 Years

Age :: Over 25

Extra Info Here – anything else that would help us get your loan approved :: My credit is not bad, its just I lack the credit history.  I purchased a car 3 years ago and I have made every payment on time. I am currently living with my grandparents.  I am helping take care of them along with my uncle.  My uncle currently owns the house which he is not charging me rent for.  I have been presented with an opportunity to challenge myself and to learn from someone who’s had a successful business.  I will be able to make a down payment – as much down as I can possibly manage.

Sex :: Male

Marital Status :: Married

Ever Claimed Bankruptcy? :: No – never

What Country is Your Primary Address :: United States

What City/Town in California do you reside :: San Francisco

Have you checked your credit report lately? :: No

Would you consider your credit rating to be? :: Fair

Collateral? :: No

Down Payment? :: Yes

If down payment, how much? Explain please. :: I am able to put down $1,500 for a down payment, and maybe another $10,000 dollars from the sale of a used car I don’ t need any more.

Do you a have co-signer or co-borrower? :: No

Employment Industry, Title, Experience, Background – All info is secure! :: I have been in the restaurant industry for 8 years now.  I worked on the Cruise Ships for 3 of those years.  It was hard work and long hours.  I enjoyed myself and learned quite a bit about managing a kitchen and keeping diners happy and satisfied – not to mention the production of 5 star cuisine.

Now you are familiar with home much money the borrower wants to borrow, and you know that the loan is for business purposes. You know everything you need to know except the applicants credit score, which how this loan is going to be decided anyway.

For the sake of other applicants wanting know the breakdown of this restaurant loan, we will carry out the normal calculations.

Restaurant Business Loan – 10% APR Over 10 Years

Principal Loan = $60,000
Interest (APR) = 10%
Length of Term = Ten Years
Repayment Schedule = Monthly

Total Payment Schedule and Interest On The Restaurant Loan

Total Amount to be payed: $90,247.03
Total amount of interest $30,247.03
Payments: $741.76 Every Month

This payment schedule assumes there is no down payment, and as you know, our applicant said that he may be able to put together a down payment of $10,000. So let’s take that into consideration now and find out what the payment schedule would be.

Restaurant Business Loan – 15% APR Over 15 Years

Principal Loan = $50,000 (we subtracted the down payment of 10,000 dollars from the $60K)
Interest (APR) = 15% (we are assuming that the applicant has a FICO score of only 620)
Length of Term = Fifteen Years
Repayment Schedule = Biweekly

Total Payment Schedule and Interest On The Restaurant Loan Now

Total Amount to be payed: $106,393.86
Total amount of interest $56,393.86
Payments: $272.06

So now the payments are made every 14 days (biweekly) and the monthly responsibility of the new restaurant owner is close to $540 dollars. His interest paid over 15 years is high at $57,000 dollars. Total to be paid back after principal and interest is over $100,000 dollars. Allot of interest for our young entrepreneur, but it may be worth it if his business succeeds to make a handsome profit in the next few years.

There is a  strong market for a Steak and Lobster restaurant in this area of Southern California. Remember that if a restaurant prepares really good food and the word gets around, diners will travel from nearby towns and city centers. In his market area he is competing in Temecula, Murrieta, Sun City, Lake Elsinore, Sedco Hills, Canyon Lake, Wildomar, Fallbrook, Carlsbad, Oceanside, Escondido and Hemet. Some of these towns and cities are a bit of drive to Temecula if you are just going for a drive for dinner, but you would be surprised (or maybe not).

This applicant was granted a loan for $80,000 actually, but it was not approved and dispursed by a bank – it was lent by a private hard money lender who wanted a piece of the business. The private lender got 10% of the business, which was fine with the debtor, as he had no real choice. He still has total control of the business in the end, and the lender gains if it succeeds. This is why the loan ended up being for $80,000 – the lender wanted to make sure the restaurant succeeded in getting started up and comfortably off the ground.