Restaurants in a growing suburb face a particular temptation: open a second location. The cash needed is much larger than the money the first one makes.
Apply Now →Only item five resembles operating cash. The first four are project spending, which is why a term loan or equipment financing may be a better comparison than general working capital.
Pearland is a city in Brazoria County, with portions extending into Fort Bend and Harris Counties, and a principal city of the Houston-Pasadena-The Woodlands metropolitan area. It had 125,828 residents at the 2020 census, up from 91,252 in 2010. Wikipedia describes the main east-west corridor as Farm to Market Road 518/Broadway and notes that West Pearland has a lot of suburban development, with many master-planned communities. New households bring new demand for places to eat, and new restaurants. An owner here is as likely to be competing with a new opening down the road as with an established place.
The Atlantic hurricane season runs from June 1 to November 30. A restaurant in the Gulf Coast region should plan for a possible closure: lost sales, spoiled food and rent and payroll still due. Many owners set a closure reserve, and use a bridge only for what that reserve cannot cover.
| Item | When | Notes |
|---|---|---|
| Payroll | Weekly or biweekly | Fixed to the calendar |
| Food orders | Several times a week | Prices move |
| Rent | Monthly | Does not flex with sales |
| Sales tax | Monthly or quarterly | Texas Comptroller sets filing frequency by letter; maximum combined rate 8.25 percent |
For illustration only, not our terms: a restaurant that spends $11,000 a week and sees three softer weeks at $8,000 in sales has a gap near $9,000 before any cushion.
Before taking on a second lease, check what the first location is actually producing. A simple test: take the last three months of weekly sales, subtract weekly fixed costs, food and labor, and see what is left after sales tax is set aside. If that number is thin or erratic, a second location adds a second set of fixed costs to a business that cannot yet carry its own.
If the answers are yes, the expansion may be a well-planned project; if not, it may be better to wait, or to fund a smaller step such as a larger kitchen, a patio or extended hours at the existing site.
Funding runs from $25,000 to $5,000,000, funded in as little as 24 hours once the file is complete. The application takes about five minutes with a soft credit pull, and sole proprietors can apply. Compare the amount received, total repaid and repayment start date against what the first location can safely cover. See retail, healthcare, the Pearland overview, working capital, or apply now.
Mostly it is project spending, so compare equipment financing or a term loan to general working capital.
They are often below plan while the place builds a customer base. Plan for a slower start.
It runs June 1 to November 30. Hold a closure reserve and plan funding only for the part it cannot cover.
It is collected from customers and owed to the state, so keep it out of your free cash.
Yes. Sole proprietors can apply, and the application takes about five minutes.
Three months of business bank statements and a 5-minute application. FICO 500+ considered. $25,000 to $5,000,000, funded in as little as 24 hours.
Apply Now →It takes about two minutes and it will not affect your credit score.
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