The old milkshake machine at your diner has sentimental value. Unfortunately, the outdated machine truly needs an upgrade. The profit margins on milkshakes can be significant, but costs may sway you from buying a new one. Why not take out a loan? Concerns over repaying the loan can be addressed easier than first thought. One way to deal with costs involves procuring custom financing from a restaurant equipment loan service.
The Pressing Need for a Loan
Cash flow may be short, which dissuades decisions on purchasing a new milkshake machine. Ironically, upgrading to a new machine could eventually improve cash flow by delivering the following benefits:
- Quieter Operations: Less noise in the restaurant means fewer disturbances to annoy customers. Does the older machine lead people to turn their heads and say "What's that?" If so, the time has arrived to upgrade.
- Easier Cleaning: Tying workers down by making them struggle cleaning up a "parts-heavy" machine takes them away from other duties. Those duties include serving customers.
- Faster Milkshakes: Customers generally don't like to wait. A cumbersome milkshake machine capable of only slowly making one or two milkshakes at a time won't help your business.
Taking out a loan to buy a new milkshake device makes sense when the old device undermines the ability to generate profits. With customized terms, the loan won't likely be a drain on cash flow.
Understanding Customized Funding
Businesses don't always deal with consistent cash flow throughout the year. Restaurants, in particular, experience ups and downs in business due to many factors. A standard loan with standard repayment terms might present difficulties to a restaurant. Lenders realize this. So, they create special customized financing options to support the business' timely repayment.
A common feature of custom financing involves seasonal payment agreements. With seasonal payments, the borrower wouldn't need to pay during the slow months of the year. If cash flow remains consistently short during the winter, the borrower and lender may come to an agreement to skip payments December through February. As the temperature picks up and milkshake sales increase, monthly loan payments resume.
Setting Up Customized Funding
Prior to applying for a loan, brainstorm and write down any concerns regarding financing. In addition to seasonal cash flow issues, interest rates and loan terms could be worrisome. Discussing these matters with the lender may lead to agreeable solutions. Perhaps low payments throughout the bulk of the term could be concluded with a final balloon payment on the balance due. Leeway exists when asking for customized financing.
For more information, contact your local restaurant equipment loans office.