Ordering restaurant loans doesn't come over-easy

By RANDY CRAIG

When Tom Casaburo searched for financing for his first restaurant, he talked to practically every bank in town. Even having one of the bank presidents as a neighbor didn't help.

“He later said it was the best loan he never got to make,” said Casaburo, owner of the five Casa Restaurants in Fort Wayne

Finally, Casaburo and his partner, neither of whom had restaurant experience, found a sympathetic ear at the now-defunct Indiana Bank. They convinced the loan officer of the need for an Italian restaurant in town and displayed the success of their past business endeavors and determination to succeed.

“(It was) a real good sales job, I guess,” Casaburo said.

Not much has changed since Casaburo's struggle to finance his restaurant decades ago. Banks still shy away from lending money for restaurant ventures. Their high failure rate coupled with intense competition makes some banks skittish.

That's why perseverance like Casaburo's pays off. The bank submitted an application for a Small Business Administration loan, with Casaburo putting up equity in his home and car and his partner's life-insurance policy as collateral.

Linda Smith, vice president of National City Bank in Fort Wayne, said entrepreneurs looking to start a restaurant will be more attractive to banks if they already have experience running a restaurant. They should also have collateral in the form of CDs, stocks or bonds in addition to any restaurant assets they might already have. A strong, detailed business plan helps, too, she said.

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