Taking your next step in owning a restaurant has to be to start to get your own paperwork in order so that's what we'll discuss here.
Before you go to any lender and it doesn't matter if that's going to be a bank, credit union, family member or another private financier, you'll want to start to get your own ducks in a row and that means getting all your paperwork in order!
Tax Returns
It may seem obvious that you'll need at least three years of tax returns and many times you may also need up to five years but, trust me, some people haven't even filed last year taxes so it must be discussed.
What information will tax returns provide to your lender?
Your tax returns will show a lender your current address and prior ones. A lender may appreciate the fact that you have been at the same address for 3-5 years and shows you are stable and a member of the community. If you have had an unstable address meaning you've been moving around a lot, be ready to explain why that is the case and how you are now done moving and ready to take on the responsibility of owning your own restaurant. This will be discussed more in your business plan but, for now just now that it will be something that comes up with your financial institution.
Tax returns show your income which is a very important part of getting financing for your start up restaurant.
Tax returns show your social security number and your financier can instantly (or at least rather quickly) get your credit report to match it against your return.
Tax returns also show not only your income but, any loans and debt if you have itemized your deductions.
Your employer is listed on your tax returns so your financier will be able to verify the information you tell them simply by comparing it to your tax returns.
Can you tell by now that your tax return tells a lot about you already so
be prepared to always be honest and never withhold any information!
Note: Amend or make changes to your tax returns that you realize are not accurate. You have three years to make adjustments or amendments and this could work out to your advantage if after reviewing them you realize that mistakes have been made.
Current Loans and Bills
Your financier will want to know all of your current loans, what you owe to who, the account numbers, the balances, the interest rates and any other bills you have now. We;ll help you with how to organize your bills too! This information will no doubt be asked on your initial application for your restaurant funding so it's smart to know it now. Start to get your bills organized so that when the time comes, you have all of this information handy without delaying your meetings and appointments with the bankers.
Use these tips to eliminate debt and get out of credit card debt!
Resume
You should always have a resume to give to your prospective financial institution so that they can see and will know your qualifications as part of your discussions on them lending you money. We'll discuss a professional resume soon so if you don't have one already, we'll give you the tips you need to add to yours.
Business Plan
Create your business plan to provide to your financier and we will definitely add more details on what to include for your successful business plan soon. Stay tuned but, know that you will need and want one!
Profit and Loss Statement
If you are already in business of some kind and want to move to owning a restaurant, you'll need your current and past three to five years of P&L statements to show proof of your ability to run a successful business and in this case, a successful restaurant.
This should be what you need and it may sound like a lot but, it's all useful and necessary information that your lender will want so this is your head's up! Start preparing your paperwork now to make a smoother and more efficient process of getting your loan or loans for your restaurant.
Thanks for reading and we look forward to your comments so that we can help you best.
Cheers!
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