Match the loan to the job
The most expensive mistake in restaurant financing is not a high rate. It is using the wrong structure: a six-month advance to pay for a ten-year build-out, or a large term loan to cover weekly inventory swings. Start with what the money is for, then pick the product.
| What you need | Usually fits |
|---|---|
| Open a second or third location | Expansion loans, SBA loans, construction and renovation loans |
| Kitchen, bar, brewing or distilling equipment | Equipment financing |
| Buy or build your building | Commercial real estate loans |
| Remodel or build out a space | Construction and renovation loans, term loans |
| Payroll, inventory, slow-season cash | Working capital loans, business line of credit |
| Payments that move with sales | Revenue-based financing |
| Urgent, short-term need | Merchant cash advance, working capital |
| Open a franchise unit | Franchise financing |
| First restaurant, not yet open | Startup restaurant loans |
| Lower credit score | Bad credit business loans |
All restaurant loan types
How to compare restaurant loan offers
When offers come back, compare them on the same terms:
- Total cost: everything you will repay above the amount you receive, including fees
- Payment size and frequency: monthly, weekly or daily, and whether it fits your slowest month
- Term: how long you will be paying, and whether it matches the life of what you are buying
- Fees and prepayment terms: origination, closing, draw and prepayment costs
- Collateral and guarantees: what you are pledging and what you are personally guaranteeing
- Speed: when funds actually arrive, compared to when you need them
We lay out every offer side by side in plain terms, and we tell you when the right answer is a cheaper option that takes longer.
What every lender will ask for first
Almost every restaurant loan starts with the same basics: a short application covering your business type, time in business, monthly revenue, how much you need and what it is for, and your three most recent months of business bank statements. Larger and longer loans add tax returns, financial statements and project documents. Start with the basics and we will tell you what else your best options need.
If you run a specific type of hospitality business, our hospitality financing pages cover bars, breweries, distilleries, hotels and more. For local resources, see Colorado and Tennessee.
Questions owners ask
What types of loans can a restaurant get?
Restaurants commonly use SBA loans, term loans, equipment financing, working capital loans, business lines of credit, commercial real estate loans, construction loans, revenue-based financing and merchant cash advances. Franchisees and startups have their own options too. The right choice depends on what the money is for, how fast you need it and your financial profile.
Which loan is right for my restaurant?
Match the loan’s term to what you are buying. Long-life assets like build-outs, buildings and kitchens fit long-term loans such as SBA or real estate loans. Equipment fits equipment financing. Recurring short-term needs fit lines of credit or working capital. Fast, expensive products should be reserved for urgent short-term needs with a clear payoff.
How do I compare loan offers?
Compare total cost, payment size and frequency, term length, fees, prepayment terms, collateral and personal guarantees, and funding speed. A low payment can hide a long term and high total cost, and a low factor rate can hide a short term and high annualized cost. Put every offer in the same format before deciding.
What is the easiest restaurant loan to get?
Products underwritten mainly on bank deposits, such as merchant cash advances and some working capital loans, are usually the most accessible, but also the most expensive. Equipment financing is often accessible because the equipment is collateral. Easy is not always best; the cheapest loan you can qualify for in time is usually the better choice.