Online lending platform Biz2Credit announced on Friday its latest analysis of industry sectors found that restaurant loan approval rates were above 50% in 2018. Biz2Credit revealed that though the analysis noted that restaurants and accommodation businesses had the highest loan approval rates (51%) in 2018 compared to other industries, including retail, health care, and professional and personal services.
While sharing more details about the research, CEO of Biz2Credit, Rohit Arora, stated:
“Restaurants and other food and accommodation businesses are inherently more risky than other types of businesses. However, with a strong lending atmosphere, the approval rates have been surprisingly high. One reason for this result is that many food businesses do not qualify for traditional bank loans, but they are able to get funding via non-bank lenders, who charge higher rates but are willing to provide funding.”
Biz2Credit also examined the financials of companies that applied for funding in 2018 in the following sectors: restaurants and accommodation, healthcare, personal services, professional services, retail, and information technology (IT). Technology companies led in terms of average funded amount, followed by retail, restaurants, personal services, healthcare, and business & professional services. Arora then shared:
“Technology firms, which have performed well in this economy, received the largest average amount of funding. Tech businesses received the highest level of funding in New Jersey. The highest levels for retail and restaurants & accommodation were in New York. Personal services funding was highest in Texas, but professional services funding was highest in Massachusetts. For healthcare, California was the leader.”
Arora went on to add:
“Restaurants have the highest revenues. However, they also are high cost/low margin businesses. Healthcare businesses had the second highest average revenues. With the oldest of the Baby Boomers now reaching their mid-seventies, I expect that companies that cater to their needs will continue to thrive.”