Compare restaurant loans

There’s a lot of stress in the kitchen: heat, a large crowd, special orders — all of it can be demanding. Luckily, that demand can help you prepare for owning your own business. Running a restaurant can take steep investments of time and money, and a great deal of dedication on top of that.

Because the right financing can potentially make or break your new venture, you’ll want to carefully consider your needs and your options. Our guide takes you through your options, how to compare them and even tips from professionals in your field.

What loan options are available for restaurants?

Here’s a breakdown of the main financing options you can choose from:

• Business loans from banks. A good relationship with your lender can ease the funding process, so why not start with a financial institution you already have rapport with? Your local bank or credit union could provide the financing you need.
• Business loans from online lenders. Many businesses don’t qualify for a traditional bank loan. Often thought of as beneficial when you can’t qualify for those loans, an SBA loan comes with some unique features — regardless of how eligible you are for other types of financing. These loans are guaranteed by the government for up to 90% of their value. This guarantee can make lenders more accepting of borrowers with a less-than-stellar credit history, and potentially supply better rates as a result of the lower risk.
• Equipment financing. New and used equipment can sometimes be financed in-house by the place you’re renting. If not, you can look into a business loan to purchase equipment.
• Inventory financing. Designed specifically for obtaining supplies and inventory, the types of financing offered range from short term loans to lines of credit.
• Invoice factoring. If inventory isn’t a problem but you need working capital, consider invoice factoring, in which you sell account receivables to a third-party at a discount.

Business loan options to consider for your restaurant

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Name	Product	Filter Values	Loan amount	APR	Requirements
First Down Funding business loans			$4,000 – $300,000	5.49% to 22.79%	At least 1 year in business, an annual revenue of $100,000+, and a minimum credit score of 300	Alternative financing up to $300K with highly competitive rates.	Check eligibility More Info		loading Fetching your data...
Lendio business loan marketplace			$500 – $5,000,000	Starting at 6%	Operate business in US or Canada, have a business bank account, 560+ personal credit score	Submit one simple application to potentially get offers from a network of over 75 legit business lenders.	Check eligibility More Info		loading Fetching your data...
Fundera			$2,500 – $5,000,000	7% to 30%	$300,000+ of annual revenue, 680+ personal credit score, in business for 3+ years	Get connected with short-term funding, SBA loans, lines of credit and more.	Check eligibility More Info		loading Fetching your data...
Kickpay e-commerce loans			$20,000 – $1,000,000	Not applicable	At least $250,000 in the past 12 months of revenue, e-commerce business, use a 3rd party fulfillment center for storing and shipping inventory, at least one US location.	Get a loan for your e-commerce business based on your sales history.	Check eligibility More Info		loading Fetching your data...
Credibly Business Loans			$5,000 – $250,000		6+ months in business, $180K annual business revenue, 500+ credit $15K+ in monthly deposits	Funding to cover business expenses with daily or weekly repayments.	Check eligibility More Info		loading Fetching your data...
SmartBiz			$30,000 – $5,000,000	4.75% to 7.00%	650+ personal credit score, US citizen or permanent resident, 2+ years in business, $50,000+ annual revenue, no outstanding tax liens, no bankruptcies or foreclosures in past 3 years	Get funding for your small business with a government-backed loan and extended repayment terms.	Check eligibility More Info		loading Fetching your data...
LendingClub small business loans			$5,000 – $500,000	9.77% to 35.98%	12+ months in business, $50,000+ in annual sales, no bankruptcies or tax liens, at least 20% ownership of the business, fair personal credit score or better	With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.	Check eligibility More Info		loading Fetching your data...
Monevo Business Loans			$500 – $100,000	3.99% to 35.99%	Credit score of 500+, legal US resident and ages 18+.	Use this connection service to get paired with a loan you can use for business.	Check eligibility More Info		loading Fetching your data...

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How do I compare my financing options?

It can be overwhelming to compare your options, what with so many ways to get funding. Here are a few elements you can focus on when making a decision.

• Eligibility criteria. The age of your restaurant, annual revenue and your personal credit score, among other factors can all affect your eligibility.
• Loan type. When you’re looking at financing, you may want to consider how the different merits of each could fit your needs. A traditional loan or an SBA loan will likely have stricter qualifications than a short-term loan will, but the rates are almost certainly significantly better. Other types of financing for specific needs, like equipment or inventory, and may not provide you with working capital.
• Loan amount. Be sure the lender’s maximum amount offered covers what you need. But avoid applying for too much — taking on more than you need can lead to paying unnecessary interest.
• Loan term. With a longer loan term comes lower monthly payments but a higher overall cost due to more payments toward interest.
• Costs. The interest rate and any fees charged can help you determine how much your business loan will cost. If the lender provides an annual percentage rate (APR), this can give you an idea of how much you’ll pay on top of the loan principal. Keep in mind that the APR doesn’t include penalty fees for things like late or missed payments.

What do I need to apply?

Generally, you’ll need to provide the following:

• A detailed business plan.
• A statement of your financial need.
• Your business and/or personal bank account statements.
• Profit and loss statements.
• Your business ownership documents.

Bottom line

A great restaurant is about making an influential dining experience. Keep your goal in mind to give yourself some perspective. Just as each guest’s time at your restaurant is unique, so are your restaurant’s needs. If you’re looking for solid financing, patiently taking your time can ultimately lead to you realizing your vision.

Frequently asked questions

• Can I get financing for my restaurant if it’s a startup?

  Potentially, yes. It may be more difficult to secure a traditional business loan, but you have other startup financing options. Finding a partner or an investor or running a crowdfunding campaign could potentially get you funding as well.

• Can I get special financing if I’m a veteran?

  Yes, you can look into VA business loans or veteran-specific loans and resources provided by the Small Business Administration.

• How long will it take to get financed?

  Timing varies by the type of financing you’re seeking, the lender and the amount you’re borrowing. It can take anywhere from a couple of business days to over a month to receive funding.

• Can I get a new loan or line of credit if I already have one?

  Potentially, yes. Whether you can depends on the lender you’re borrowing from and applying with. Keep in mind that just because you’ve successfully borrowed from a lender before doesn’t necessarily mean you’ll be able to again. You may also want to evaluate if you need a second financing option before getting into more debt. Avoiding extra debt means avoiding extra interest payments.