Goldwell Commercial Capital, a small-business funding broker in Medford, Oregon, sets out a funding sequence for a restaurant opening a second location: first-unit statements, the site and lease, a Medford, Oregon building permit search, contractor and equipment bids, then a split between a term loan and equipment financing. Jackson County had 490 restaurants and other eating places in 2023.
Restaurants in Jackson County, OR by the numbers
Jackson County had 563 food service and drinking places in 2023, 490 of them restaurants and other eating places, employing 7,123 people (U.S. Census Bureau, County Business Patterns 2023). Only 24.5 percent of restaurants had fewer than five employees, so a second unit usually means a second full payroll. In ZIP 97501, the office ZIP, accommodation and food services had 190 employer establishments (ZIP Code Business Patterns 2023).
Step 1: the first location's numbers
Partners reviewing a second unit read the first one. Before anything else, get a full year of clean statements for the existing restaurant: profit and loss, bank statements, card processing and any existing equipment loans or advances. A first unit that is profitable on paper but with mixed personal and business spending is the commonest obstacle to a second.
Step 2: the site and the lease
Get a letter of intent or draft lease before applying for anything. Note the term, the rent, any tenant improvement allowance from the landlord, and whether the landlord must consent to alterations. A partner financing a build-out on leased space will usually want the lease to run longer than the loan.
Step 3: a Medford, Oregon building permit search
Search the building permit records for the address to see what work has been permitted there before. A space that was a restaurant may still need permits for a new hood, grease interceptor or seating change; a space that was retail almost certainly will. Search specifically for Medford, Oregon: 'medford building permits' searches are dominated by Medford, Massachusetts. If the site is outside city limits, the county or another city handles permits instead.
The city business license is a separate record; the Medford, OR business license guide covers it.
Step 4: bids before the funding request
Get the contractor's bid for the build-out and the equipment supplier's quote separately. Mark which items the landlord's allowance covers, which are equipment and which are construction. Add a contingency for what the permit review or demolition turns up. Now the request has a real size.
Step 5: split the funding
| Cost | Usually paid with |
|---|---|
| Build-out, plumbing, electrical, finishes | Business term loan |
| Hood, ovens, walk-in, dish machine | Equipment financing |
| POS system and screens | Equipment financing, or a short lease |
| Opening stock and first weeks' payroll | Cash reserve, or a modest credit line |
Keep a single sheet that lists every cost line, the bid it comes from and the option meant to pay for it. When a partner asks why the request is the size it is, that sheet is the answer, and it keeps a build-out cost from quietly ending up on short money.
Restaurant equipment financing lets each piece secure its own loan, which can leave more room for the term loan. A merchant cash advance is not a loan and is a poor fit for a build-out; its collection begins immediately, before the new room earns anything.
Step 6: an opening reserve
The new location will not earn from the first day. Keep enough cash, or an undrawn line, to carry its payroll and food costs for the opening weeks without drawing down the first location. Partners like to see that reserve in the plan. More on the sector is on restaurant and food service financing, and other posts are on the blog.
By Goldwell Commercial Capital · Updated