Can I get a loan to open a restaurant with no prior experience?

Choosing to open a restaurant is exciting, but getting the loan you need as a first-time entrepreneur may not be straightforward. Generally, lenders prefer to lend when the entrepreneur has a background in food or hospitality. Lenders typically believe that prior experience, even if not in food service, lowers the risk of operational failure.

If you are a first-time entrepreneur, you will want to develop a solid business plan: one that demonstrates you understand your target market, are aware of your competitors, have carefully thought about how you will manage the operation on a day-to-day basis, and have thought about any other necessary considerations (such as suppliers). If you have experience managing other businesses, handling cash and other finances, then you should talk about this experience. It may also help your case if you partnered with another entrepreneur that has experience in restaurants. Lenders feel comfortable lending when they have some semblance of experience on the team.

The other major factor for you to consider is your personal credit score. This will help as much as anything else when you go to apply for your loan. There are government-supported schemes such as CGTMSE and some of the MSME loan programs designed to help new small business owners; including some elements of food and hospitality.

• Focus on a business plan that really shines
• Be clear with any skills or partnerships you have under your belt
• Keep your credit score high
• Look into government or MSME schemes
• Be ready to outline your approach

If you believe in your idea and use the checkpoints you have available to you to your advantage, you can get the funding you need to bring your restaurant vision to life.