Congratulations on doing so well in a tough industry, Arlene. The fact that you already established a successful restaurant in Chelsea will, without a doubt, help you garner the support you need for your new location in Harlem.
However, before approaching potential investors and other funding sources, you should have a clear understanding of how this deal could be structured. For instance, will the new restaurant in Harlem be a stand-alone entity, or do you plan to combine the ownership of both restaurants under, let’s say, a holding company? Also, like RobertJ pointed out, do you plan to offer equity, debt or a combination of both? Do you know exactly how much financing you need and when it’s needed?
Again, have you thought about combining the ownership of both restaurants under a holding company? Doing so would probably help convince investors to come on board on more favorable terms because investing wouldn’t be nearly as risky as if the place in Harlem would be a stand-alone entity. Another factor is your corporate income tax situation. Assuming that your place in Chelsea is really buzzing, you could use initial losses or capital investments for the restaurant in Harlem to manage tax liabilities. Other points that may be worth considering are increased purchasing power, higher creditworthiness, increased efficiencies in managing and operating both businesses (e.g. human resources, marketing, etc), and leveraged abilities to raise capital. On the downside, this structure would probably make you feel like you’re running a corporation, rather than a restaurant.
Moving on to potential financing options. Have you considered applying for matching funds under the “I Love New York” program? Since you already have a few investments in place, this may do the trick, as the Empire State Development Agency would match these investments. This program was initially designed to stabilize the economy of New York City post 9/11.
Also, try local capital resources like The New York Community Investment Company. They are quite flexible in their requirements and they do give preference to minority owned businesses (including businesses owned by women).
Other than that, I would probably recommend pursuing angel investors that are already involved in the hospitality arena. Depending on how connected you are in the City, you may want to start talking to some fellow restaurateurs to see who they are working with.
If you are interested in sharing the details of your investment proposal, please IM me and I will be glad to give you a few pointers.
I hope this helps.
Advanced Document Design for entrepreneurs, intermediaries, and the financial services industry.