Business Loans for Bake Shops: Financing Options for Bakeries

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Choosing the Best Bake Shop Business Loan Program

According to the American Bakers Association*, the baking industry generates more than $154 billion in economic activity annually and employs almost 800,000 highly skilled people. Who doesn’t like baked goods or pastries? But, it’s no secret that bakery owners have had difficulty getting business loans for their bakery over the years. Whether you are a member of a credit union or national bank, it is tough to get many types of bakery funding or any bank loans, for that matter. But these are new times, and from that, new alternative lending sources. The bakery industry has more access than ever before to get small business funding.

Traditional lenders see bakeries as a risky business, which means qualifying for loans is a serious burden. These lenders won’t give loans out to just anyone. They’ll likely require an excellent credit score, a robust business plan, and a significant amount of assets in your business. Some could even ask you about your relevant hospitality experiences as well. That’s where AdvancePoint Capital can help.

AdvancePoint Capital’s goal is to help small business owners. We have lots of experience providing bakery loans for bakeries for years and can allow you access to the best alternative business lending products. We understand the difficulties of operating a bakery and the need for business loans to support it. Our job is to effectively provide the best business funding products to you, the small business owner, so you can effectively operate your business. Whether you’re looking to add customers, purchase equipment, improve counter service, need some working capital, or plan on expanding operations — we have the best funding solutions you can rely on for your bakery.

Types of Bakeries That Can Acquire Business Loans

  • Commercial/Wholesale Baked Goods
  • Retail Bakeries
  • Bakery Cafes
  • Pastries and Baked Goods Shops
  • Home Bakeries
  • Bakery Schools
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AdvancePoint Capital makes the loan application process a simple, straightforward experience.

The 7 Best Bakery Small Business Loan
Options for Bakeries

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Long-Term Small Business Loans for Bakeries

Short-Term Business Loan for a California Small Business icon

Short-Term Small Business Loans for Bakeries

Business Line of Credit

Business Line of Credit for Bakeries

SBA Loan

Small Business Administration (SBA) Loans for Bakeries

Merchant Cash Advance for a California Small Business

Merchant Cash Advance for Bakeries

Invoice Financing

Invoice Financing for Wholesale Bakeries

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Business Credit Cards for Bakeries

Benefits of Bakery Loans

Running an Auto Repair shop can have a unique set of cash flow issues. Payroll, advertising, equipment maintenance, and purchases — as well as property maintenance and improvements, can really cut into cash flows. This makes it essential to have financing to balance your revenue and have the proper reserves to handle anything that may come up, such as capital expenses.

Working Capital

Operating small businesses in the bakery industry is a complicated venture with many moving parts to it. Various issues can impact the company’s cash flow, like seasonality, holidays, location, changes in food trends, and competition. Small business funding is necessary when meeting payroll is not an option as the people who work at the bakery are usually essential. Also, it’s critical to have bakery loans in place to control the ups and downs of the business and stabilize cash flow. From working capital to seasonal needs, bakery loans are a sound working capital funding option.

Business Facility Expansion/Renovations

Bakery shops may need upgrades or repairs to the facility, spruce up the interior décor or exterior appearance to maintain or attract customers, and maintain a competitive edge to grow your business and increase market share. Perhaps you’re adding a new location. With so many financing options available, growing your bakery can come in many forms. These bakery loans can be used to purchase additional inventory, lease more space, expand marketing efforts, buy new equipment, or even open up another operation.

Point of Sale Systems, Software, and Technology Upgrades

The point of sale systems is continuously improving and providing efficiencies for bakery operations. It’s a foregone conclusion that financing will be needed as the cost can get quite absorbent. Bakery business loans can be used to update systems and create more efficient processes within your operation. Bakery businesses are always looking for new ways to keep their tables and cafes full. Improving the customer experience with easier processes and systems for staff can make a significant impact.

Advertising

What owner doesn’t want more customers and an increased customer base? Internet marketing and social media are not a trend but something customers demand. Focusing on the internet has become a must for retail bakeries looking to grow, but it has added additional costs to the bakery operation. That’s why bakery loans for marketing campaigns and social media are so popular. Having a presence online with Google, Yelp, and Trip Advisor, plus maintaining a social media presence on Facebook and Instagram, is very important for success and meets customers’ demands. Your bakery website and work on search engine optimization help keep your small business on the top of google search and grow your business by adding customers.

Maintenance and Repair of Bakery Equipment

Equipment financing allows bakery shop owners to repair and/or replace essential equipment at the core of the bakery business. Equipment can be an expensive investment. A bakery business loan that allows the bakery owner to improve kitchen equipment and costly parts is often a lifesaver.

Purchase of New Bakery Shop Equipment

The bakery industry relies on high-quality equipment for operations. New equipment can be expensive. Bakery loans might be essential when repairs are not an option due to the high costs of replacement for the business.

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3 Questions to Ask Yourself When Getting Small Business Funding:

1. How long has your bakery been in business?

Time in business is a standard requirement for bakery financing — or any type of loan you plan on obtaining as a business owner. A young shop is far riskier than a seasoned one. This information shouldn’t be news to any bakery owner reading this, but it’s vital for bakery shop owners everywhere to understand.

Due to the high risk of the restaurant and baking industries, lenders must know if you’ve been around for a substantial amount of time. Time in business shows lenders that you can overcome obstacles and tackle challenges that come with time in the industry. If so, you’re in much better shape to obtain financing for your bake shop.

2. How does your bakery business handle cashflow?

There are some documents that many lenders will require so that they can assess a loan under your circumstances. A bakery owner planning on getting small business funding should always make sure to offer up documentation like business bank statements, personal and business tax returns, profit and loss, and perhaps, even more, depending on the small business funding option. This information proves any revenue and profit — which is frequently a big player in whether or not you’ll qualify for loans. Now, what paperwork you’ll need ultimately depends on the small business funding product. A business cash advance may require one thing, but a term loan is likely to have much harsher requirements. However, all of these documents we mentioned are relatively typical when attempting to obtain funding for bakeries.

What are your borrowing habits?

While many funding options have varying credit score requirements, all of them will require some sort of personal and business credit score and overall credit history. Bakery owners need to show lenders how well they manage loans. It’s all about trust and sound investments when it comes to bake shop loans.

So, a credit score is important to show banks that your borrowing habits are fruitful for the lender. Now, even if you have less than stellar credit, there are still bakery loans that you can seek. However, the interest or term will be more costly due to bad credit. You won’t see bank loans or credit unions offer loans to poor credit borrowers.

That being said, alternative business finance companies still provide financing opportunities that business owners can take advantage of for working capital or any other need. Make sure you are constantly working to improve your personal credit.

How Do You Get a Small Business Loan for a Bakery Shop?

There are many options to consider, and with such a wide range of lenders and financing options available, it can be challenging to get started with the application process. Lenders will want some pertinent information, regardless if they’re an online lender or from a traditional financing institution. This information mainly serves to confirm your small business’s financial history and legitimacy — and the bakery owner should be informed about what information they should have on hand before applying for bakery loans.

For years, we’ve empowered small business owners around the United States with the best financing opportunities and loan options that people like you can use to fund your operation.

Depending on the bakery loans you’re looking at, each will have different requirements. However, there are some standard questions that you can expect to run across during your search for loan options.

advance point bakery loans

Why AdvancePoint Capital?

  • Experience with Bakery Owners – We have been funding bake shops and cafes for years.
  • Trust – Excellent reviews and feedback from bakery small business owners
  • Loan Specialists – Experiences Business funding specialists who know the bakery industry.
  • No Obligation – No cost, no commitment quotes
  • Products – A variety of business loan products for professional bakeries. We don’t just offer what we have; we supply what’s available in the marketplace.

Frequently Asked Questions

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