Coffee Shop Alternative Financing Solutions

Opening a coffee shop can be a great way to connect with the local community. For many people, a cup of coffee is the only way to start their day, getting them prepared to go to work. It’s estimated that over 150 million people drink a cup of coffee each day in the United States. These figures prove that you could be able to turn your coffee shop into a profitable business.

Lately, small business owners have faced a lot of roadblocks. Because of the popularity of the sector, there is a lot of competition. In some cases, you might be going up against the marketing departments of multi-billion dollar companies, like Starbucks. This year also saw the outbreak of a global pandemic. Suddenly, people stopped traveling into the office. For health reasons, many small businesses were forced to shut their doors.

Thankfully, you will be able to overcome these challenges. The biggest drawback, though, is the amount of money that you have at your disposal. Many coffee shops were hit hard by the pandemic. Often, your capital will have been eroded during the pandemic. Let’s take a closer look at this situation.

Why Would You Need A Coffee Shop Business Loan?

There are many times when it would make sense to go with one of these financing solutions. For example, you might need to increase your marketing budget. This will often be needed to try and get people to return to the coffee shop after the pandemic. In other cases, you might want to turn the pandemic to your advantage. This can be a great time to remodel your coffee shop, as there will be fewer customers. This new layout can encourage people to come back to the coffee shop once you’re open again.

Taking out coffee shop financing now can be one of the best ways to set yourself up for future success. For example, you might want to get some new coffee shop equipment. This will allow you to expand the range of coffee products that you offer in the future. Increasingly, people are looking for more specialized drinks. This is especially true among younger people. Being able to offer these specialized coffee products will ensure that your coffee shop will stand out.

Finally, though your coffee shop business might have been closed during the pandemic, the bills will continue to come in. For example, you will still need to pay for electricity and water. You might also need to pay the payroll taxes and wages for your staff. If you apply for a coffee shop small business loan, you will have the cash you need to pay these expenses. This will make it easier to start reopening after COVID-19. Now that we know why you might want to consider applying for an alternative funding business loan, let’s look at some of the alternative financing options that you can explore.

Coffee Shop Merchant Cash Advance

The Merchant Cash Advance is one of the most flexible alternative funding options that are available. In this case, you will be able to request the amount of capital that you will need to get your coffee shop business off the ground. Once you get approved, you will be able to get the money within two to five days: coffee shop fast cash. You will be able to request up to $500,000.

Once you have the alternative funding business loan, your repayments will be calculated based on a percentage of your future coffee shop sales. This will make the repayments easier for you to manage. It also ensures a shorter-term repayment window.

Coffee Shop Unsecured Business Line of Credit

The next alternative financing option that you might want to explore is an unsecured business line of credit. This is another flexible option. Once you have an established line of credit, you will be able to use it to get funds whenever you need them. You can return to this line of credit multiple times. In most cases, you will be approved to borrow between $10,000 to $500,000. This will give you plenty of cash.

Coffee Shop Unsecured and Secured Business Loan

If you prefer a more structured option, you might want to investigate a secured business loan. In this case, you will need to put down collateral. If you don’t make repayments, the finance company will be able to claim the collateral. This can be a good option for people who don’t have a good credit score. In other cases, you might want to use the unsecured loan option. This doesn’t require any collateral. However, you might need to sign a document stating that you will take responsibility if the loan repayments don’t get made on time.

If you choose this alternative financing option, you will be able to get between $10,000 to $500,000. The repayments will be calculated as a percentage of your expected weekly or monthly revenues. If business conditions change and the revenue drops, your repayments will lower. However, if the business does better than expected and the revenues rise, your repayment rates won’t change.

Coffee Shop Equipment Financing and Leasing

In some cases, you might need to get some equipment for your coffee shop. For example, you might need to get a new coffee maker. In other cases, you might need to get some protective screens, to protect employees. If this is the case, you might want to consider equipment leasing. This will allow you to take out a business loan to lease the equipment. You’ll pay a weekly fee, and be able to use the equipment. While you will be able to use the equipment, you won’t own it.

On the other hand, you might want to finance the equipment. In this case, it will be loaned to you and you will be able to use it in your business. However, once the loan period has ended, you will own the equipment. The best approach will often depend on the type of equipment you are getting and how long you want to use it.

Coffee Shop SBA Loans

Finally, you might want to consider a Small Business Administration (SBA) loan. This is considered one of the best loan options for those who are running a small coffee shop business. In most cases, this type of loan will be used to provide capital, refinance your debts, purchase important equipment, or finance business growth. The repayment terms will depend on the amount that you’re applying for. At the lower end, the loan might only last for one year. You will be able to get approved for between $125,000 to $10 million. However, most of the loans at the upper end will be to purchase the property.

What If You Have Bad Credit?

One of the biggest issues that people will run into when applying for a small business loan is bad credit. This can be an excuse for the banks to turn down your request. However, you will still be able to get approved. All the alternative small business funding options we discussed above will be available to people who have a poor credit history. Often, going through an alternative finance option, like the South Florida Funding Group, will give you a more flexible approval process. We will look at more than just your credit history. We will consider the history of your coffee shop business and your monthly revenue. This approach will make it easier for you to get approved.

Contact South Florida Funding Group for Coffee Shop Alternative Financing

As you can see, there are plenty of ways to get the fast cash you need to get your coffee shop up and running again. This will allow you to reopen stronger than ever after COVID-19. If you want to explore these coffee shop alternative financing options in more depth, talk to our friendly team today. We will be able to guide you through the application process, getting you the money you need fast. Call 786-544-2700 today.