Case Study: Business Loans for Food Service
Updated: Jan 6
Actual Case Study:
NY Metro Area Food Manufacturer, with no debt on the balance sheet, and net income of roughly 60k per year is introduced to our firm, after having been turned down by three separate local banks.
The Guarantor's credit was 700+, in business 5+ years, with annual sales of approximately $900k. They were endeavoring to borrow money to expand their manufacturing capacity and open a restaurant to represent their products. This use of funds was the first Red Flag to lenders. Even though the client had a good track record of earnings on the manufacturing/supply side - restaurants are notoriously risky endeavors.
We worked with the client to provide projections for a retail outlet on premises - which carries infinitely less staffing, hours, and equipment - rather than the restaurant. Given this modest adjustment and proforma, we arranged a 350k loan for the client (10 years @ 8%) and got them approved for an additional 75k unsecured line of credit at Prime plus 3%. Time to close the loan was 35 days, while the client had spent 6 months on their own without an approval.
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