Banks and commercial lenders will ask that you put a portion of your own money into your restaurant business, before they will think about lending to you. You will fare better if you have experience in the restaurant business, the stronger, the better. If you have a strong background working in a restaurant, you should be able to get your loan without too much red tape. If you do not have a great deal of experience, you may want to gather more by taking a job with a restaurant. You may also want to take a college course in restaurant management.

You can obtain financing several ways.

? The Small Business Association? they have several regular and specialty loans to suit your particular situation.

? Your own money? IRA accounts, home mortgage, personal savings and other assets, and friends or members of your family.

? Angel Investors? private investors who will lend money for small and large business ventures. There is quite a large group of Angel Investors in the United States. You can find them at the angeldeals website, and by networking with those who have started a business of their own.

? Commercial financing companies, banks, and other lending institutions, public and private.

? Friends and relatives? when you borrow the money from relatives it can be a pretty touchy business. Make sure you keep the loan on a business level, make sure you have legal papers drawn up stating how the loan will be repaid, and how much interest will be paid.

? Home mortgage? depending on how much equity you have in your home, you may be able to obtain a mortgage to finance your restaurant business.

? Life insurance policies? You may have monetary value built up in your life insurance, and you are able to borrow against the cash value and pay a lower interest rate.

? Government programs? In the right circumstances, the office of Housing and Urban Development (HUD) will give loans to restore a building. They will not provide a loan to finance your restaurant business, but they will lend money to renovate. HUD's loan application asks you to describe your business plan. This statement will include an idea of how much income your business will bring in within a certain time, show when you will need to draw cash from the loan and how that cash will be used, and you will be asked to explain how you would repay the loan.

There are several software programs that will help you to generate a plan for your restaurant business. You should obtain the money you will need at least six months before you plan to start building your business. To be on the safe side, you will want to have enough cash to see you through several months of business until your cash flow is built up.

A few tips about financing your restaurant business:

1. Make sure you are getting the best terms and interest rate on your loan? shop around.

2. Be sure to obtain financing before you sign a lease.

3. Your loan agreement should be in writing.

4. It would be a good idea to hire a lawyer or an accountant to go over the loan agreement before you sign it.

5. When accepting venture capital, make sure they do not plan to be involved too deeply in your restaurant business. You want to keep control of the business.

6. Make sure your loan doesn't carry a penalty for early payoff.

7. If you get a loan for construction, make sure you are not paying interest on the portion of the loan you have not used yet.