There is a local restaurant where I live, that has gone under and closed three times since 1992. Each time, they re-open under a similar name a few months later. They went under and closed again a couple of months ago. I noticed last week, that they are again, re-naming this restaurant and opening again. Why would any financial institution continue to finance such a person, when they have already gone under three times? I just don't understand this.
There's no assurance that there is a third party behind the restaurateur. The owner or his/her family may have more money than business sense and you may be witnessing stubborn ego rather than misguided lending. On the other hand, if you know that there's a financial institution behind the deal, you might rightfully be concerned about the lender's ability to assess risk. Restaurants are among the riskiest new ventures possible.
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There's no assurance that there is a third party behind the restaurateur. The owner or his/her family may have more money than business sense and you may be witnessing stubborn ego rather than misguided lending. On the other hand, if you know that there's a financial institution behind the deal, you might rightfully be concerned about the lender's ability to assess risk. Restaurants are among the riskiest new ventures possible.
