SBA Loan Problems in the Kitchen
Author: Valerie Mellema
Date posted: 06.10.24

Running a restaurant is something that many people dream about. However, the reality can be more challenging than you might expect. Nobody knows that better than the restaurant in Florida that is the star of this case study. Well-known for authentic Cuban cuisine, the restaurant had built a loyal following but wasn’t the most profitable in the city.

The Case of the Malfunctioning Kitchen

Kitchens are busy and rely on having functioning appliances. When a major piece of equipment breaks down, that can lead to serious issues. In this case, Murphy’s law was in effect. First, the expensive oven and range went down, making it impossible to cook meals properly.

 

This led to a lack of customers and the need to improve the restaurant’s reputation. But first, the kitchen needed a new oven, and it didn’t seem like a bad idea to update some of the other aging equipment at the same time.

Determining How Much Money Would Solve the Issue

Depending on features, a new restaurant stove could cost anywhere from $10,000 to $40,000. However, the realization that the oven had gone bad made the owners aware of a need to update other equipment in the kitchen. Once the appliances had been looked over, it was determined that $200,000 would be a reasonable amount to avoid expensive problems for years to come

 

Finding a Loan That Meets the Restaurant Needs

First, the restaurant looked at traditional lending and considered their options. Then, an employee mentioned SBA loans.

After much thought and conversation, the restaurant applied for an Express 7(a) loan. The maximum loan amount was far above what would be needed to give the kitchen the help it needed. Plus, the terms and fees associated with the loan seemed reasonable. And they would have 10 years to repay the loan.

 

The Start of a New Era

Once the new equipment was installed, most of the regulars came back to get the food they loved so much. New customers began trickling in, and the restaurant started generating additional revenue. The replacement of their old appliances made the kitchen more efficient than ever, pleasing everyone involved with their decision to take out an SBA 7(a) loan.

 

 

About The Author | Valerie Mellema

Valerie has over 16 years of experience as a professional writer of blogs, eBooks, articles and press releases, with a focus on finance and alternative lending. Valerie resides with her family in Texas and is passionate about her horses.

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