With some of the lowest profit margins of any industry, running a restaurant is expensive. Restaurant owners often need financial support to hire staff, buy inventory, and invest in marketing. A restaurant business loan can provide that support.
Reviewed by: Sarah Brooks, Personal Finance Writer and Editor
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Low profit margins, ever-increasing costs of food, and payroll expenses make it challenging for even the most seasoned restaurants to stay afloat. Sometimes restaurant owners need extra cash to get through difficult times, such as needing to replace an industrial freezer, or to expand their business by opening a second location.
In either instance, small business loans for restaurants can be the ticket. Our team of financial experts reviewed and ranked the top online business loans to help you get funded. Read on to discover our choices for the best restaurant business loans.
In this review, our team of expert reviewers has thoroughly analyzed and evaluated the rates, fees, and terms of hundreds of small business loans. We will share our findings and provide a rating methodology you can use to select the best option for your needs.
Best Restaurant Business Loans for 2023 - Full Overview
Considering the factors above, here are some of the lenders who provide the best restaurant business loans.
If you’ve made some less-than-great financial decisions in the past that have negatively impacted your credit score, you may have trouble finding a restaurant business loan. National Funding, however, has lower requirements to qualify and looks at criteria other than your credit to determine eligibility.
Main Features National Funding offers both small business loans and equipment financing and leasing. With its loans, you can borrow between $5,000 and $500,000, and with its equipment financing, up to $150,000. To qualify, you only need a credit score of 500 or more, which is much lower than most other restaurant loan options. You’ll also need an annual revenue of at least $100,000 and a minimum of $1,500 in the bank. You can’t have a bankruptcy on your credit report over the last 12 months, and you must be in business for at least 12 months.
You shouldn’t be limited in the financing options you have available to you if you had bad credit, and at National Funding, your financial situation won’t keep you from getting a restaurant business loan.
American Express Business Blueprint™ - Best for Fair Monthly Revenues
Monthly fee: 3-9% for 6 month loans, 6-18% for 12-month loans, 9-27% for 18-month loans
Loan amounts ranging from $2,000 to $250,000
No prepayment penalties and no origination fees
Convenient application process
Pros & Cons
Fair monthly revenue accepted
Only pay interest on what you use
No prepayment penalties
Confusing fee structure
Need to be in business at least one year
American Express Business Blueprint™ program hosts the American Express® Business Line of Credit product. The lender offers lines of credit for restaurants ranging from $2,000 to $250,000. American Express Business Line of Credit is best for businesses with fair monthly revenue amounts. Most lenders prefer at least $100,000 in annual revenue, but American Express Business Line of Credit requires an average monthly revenue of at least $3,000. If your restaurant experiences slow seasons that bring your monthly revenue down, a line of credit from American Express is a great option to help bridge the gap and get you through to the next busy season.
Main Features American Express Business Line of Credit range from $2,000 to $250,000 with six, 12, and 18-month terms. Rather than an interest rate, they charge a monthly fee based on the amount you borrow. Six-month term fees range from 3-9%, 12-month term fees range from 6-18%, and 18-month term fees range from 9-27%. You do not need to provide any collateral, but you will need to sign a personal guarantee. To qualify, you need a minimum credit score of 640, average monthly revenue of at least $3,000, and be in business for at least 12 months. However, all businesses are unique and are subject to approval and review.
A line of credit from American Express is a great financing option for restaurants that have been in business for at least one year and have low monthly profits. You only pay loan fees on the amounts that you use, and once you pay it back, you’re able to use it again.
Industry best factor rate for MCA - as low as 1.10
APR for the Line of credit product starts at 35%
Flexible repayment terms up to 16 months
Get funding in as little as 24 hours
Check your rate with a soft credit pull
Pros & Cons
Fast funding times
Instant lending decisions
No collateral required
Large loan amounts
Flexible payment options
Startups will not qualify
Must have $100,000 in annual revenue
Rates not disclosed up front
Backd understands that restaurants are a unique type of business, and their loans are tailored to fit those needs. Founded in 2018, Backd has helped more than 10,000 small businesses access the funding they need. Whether you’re looking to renovate your restaurant, update your equipment, or purchase a second location, Backd is there for you every step of the way.
Main Features Backd offers two loan products to restaurants: Working capital loans up to $2 million and business lines of credit up to $750,000. Working capital loans have terms up to 16 months and flexible payment options, including daily, weekly, and semi-monthly. Business lines of credit have unlimited terms and allow you to continually draw on the funds. Neither option requires collateral; and funding can be in your account within one business day of loan approval. Backd does not list a minimum credit score required to apply. Instead, they state you must be in business for one year and must have $100,000 or more in annual revenue. You also must be based in the U.S. and have a business bank account.
Backd wants to see your restaurant business succeed; and they want to provide you with the funding to do so. It takes just a few minutes to apply, and you’ll receive a lending decision instantly. Applying doesn’t affect your credit score, either, so it’s worth it to apply and see what Backd can do for you.
Excellent customer reviews on independent review sites
Pros & Cons
Simple online application
Fast funding times
Excellent customer service
Bad credit is accepted
Applying has no impact on credit score
Annual revenue requirement may be high
Startups will not qualify
Lendzi was founded in 2020 and caters specifically to business owners with high revenue. Not only that, but they also offer competitive rates and fees, excellent customer satisfaction ratings, fast funding times, and many loan products to choose from. Even if you don’t have poor credit, Lendzi is a lender worth looking into.
Main Features Whether you need to purchase new equipment, pay for operating expenses, or you’re hoping to open a second location, a business loan from Lendzi can help get you the funds you need, regardless of credit. Lendzi offers three loans specifically for those with poor credit - merchant cash advances up to $400,000, working capital loans up to $400,000, and equipment financing up to $2 million. When you apply, a representative will reach out to you and discuss your business and your loan options. Together, you can make a decision as to which option would be best for you and your business. To qualify for a working capital loan, you need to have a credit score of 500, six months of business history, and an annual income of $180,000. For equipment financing, your credit score needs to be 550 or higher. Merchant cash advances require a score of 525.
Regardless of your credit score, Lendzi is an excellent option for high revenue restaurant owners in need of financing. The lender has more than 2,000 5-star reviews across trusted review sites, they offer many different types of small business loans, and they cater to those that may be struggling. Applying takes just a few minutes and will not impact your credit score.
Bluevine Restaurant Loans - Best for Low Interest Rates
Having all your business financing services with one company saves your restaurant time and money. Bluevine offers both lines of credit up to $250,000 and a business checking account with 1.2% interest rate. Use what you make in interest to repay your Bluevine line of credit or put it back into your restaurant.
Main Features Bluevine’s line of credit is available up to $250,000, and must be repaid in six or 12 months. There are no monthly fees or prepayment penalties. To qualify, your U.S.-based business must be in operations for at least six months, with at least $10k in monthly revenue. You’ll also need a personal credit score of at least 625.
If you like having your business checking with the same company you borrow money from, Bluevine could be a good fit. And with the possibility of earning 1.2% in interest, you can make money from your efforts.
Biz2Credit Restaurant Loans - Best For Commercial Mortgage Loan
Some lenders specify what you can use a business loan for, but Biz2Credit has few, if any, restrictions on its loans. You can use them to buy kitchen equipment, purchase a building for your restaurant, hire a sommelier, or get inventory. Biz2Credit offers working capital loans, term loans, and commercial real estate loans. You’ll get a decision back in as little as 24 hours, and you can get your funds within 72 hours of approval.
Main Features With Biz2Credit’s three loan programs, you can borrow from $25k up to $6 million, though term loans cap out at $500k. You can repay your loan over 36 months. Qualifications for a loan with Biz2Credit vary, depending on the loan: Working Capital Loan - credit score: 575+, time in business: 6+ months, annual revenue: $250k. Term Loan - credit score: 660+, time in business: 18+ months, annual revenue: $250k. Commercial Real Estate Loan - credit score: 660+, time in business: 18+ months, annual revenue: $250k, must already own commercial property.
If you want to spend your restaurant loan on something that falls outside of the parameters allowed with other lenders, Biz2Credit is a good fit. And if you want your cash fast, Biz2Credit can deliver, with faster turnaround times than many other lenders.
Fundbox Restaurant Loans - Best for Line of Credit
You may not be able to predict when you need cash for your business. You might need to buy an industrial mixer this week, then pay for a broken pipe in a few months. If you want to be prepared for when you do need cash, whether now or in the future, a line of credit from Fundbox is worth looking into. Having a line of credit can get you access to cash when you need it rather than a lump sum all at once. And if a line of credit isn’t the right fit, Fundbox also offers a term loan up to $150,000.
Main Features Fundbox’s line of credit allows you to borrow funds, pay them back, then borrow them again, which means your restaurant will always have access to the capital it needs. You can repay the line of credit over 12 or 24 weeks. A term loan from Fundbox gives you a lump sum all at once, with a set 24 or 52 week repayment plan. If you’re looking to make a large, one-time purchase, a term loan may be a better fit. To qualify, your business must be U.S.-based, be six months old or older, and have annual revenues of $100,000 or more. You must also have a FICO score of at least 600, and you need a business checking account.
If having access to funds whenever you need them is appealing, check out Fundbox. Its line of credit is ideal for restaurants that have an ongoing need for working capital.
If you know you need a restaurant business loan but aren’t quite sure what type of funding is best for your business, we recommend GoKapital. Founded in 2013, GoKapital caters to all business industries by offering six different types of small business loans. Their smallest loan is a business line of credit, which maxes out at $55,000. Equipment financing and SBA loans, however, extend all the way up to $5 million. And, if you’re a startup restaurant, GoKapital offers startup and personal loans up to $500,000.
Main Features GoKapital business term loans range from $10,000 to $250,000 with terms of two to 10 years. Their largest loan is an equipment financing loan which goes up to $5 million and has terms of one to five years. With GoKapital, you can fill out an application in just a few minutes and get a lending decision within 24 hours. From there, you can see which type of loan is best for you and make an informed borrowing decision. Representatives are available via phone, email, or chat to answer any questions you may have. To qualify for a restaurant loan from GoKapital, we recommend you have a minimum credit score of 500, one year of business history, and an annual income of $240,000 or more. If the income requirement is too high, GoKapital startup loans require just $50,000 in revenue.
No matter what your restaurant needs, GoKapital has a loan for you. When you apply, a soft credit check is done which means your score will not be impacted. From there, you can decide what type of loan you’d like and view the rates and terms. If you decide to move forward, funds can be in your account within a few business days.
The cost of opening and operating a restaurant can run between $95,000 and $2 million, depending on your detailed business plan. Half of all restaurant owners start businesses using personal savings, so having a clear vision of your dream helps you plan and know how much financing for restaurants you’ll need. Listed below are current estimates for the essentials:
Rent and building fees: The median monthly cost of rent is $5,000, and depending on the location and size of the building, it could cost much more.
Food costs: The average amount of food costs run 28%-35% of sales, with steakhouses exceeding this at 40%.
Operations: Expect to spend $10,000-$100,000 to cover the cost of equipment, depending on the restaurant size.
Labor expenses: The number of employees, their salaries, and benefits typically range from 28%-35% of gross profits.
Insurance fees: Approximately $180 a month will buy restaurant insurance that can offer some protection when unexpected events occur.
Technology costs: Monthly costs of $100-$400 for technology, such as point-of-sale terminals, handheld and at-table sale systems, self-order kiosks, digital displays, cash drawers, and printers.
Marketing expenses: Low-budget marketing costs average about $1,000 a month. This may include branding, the website, and social media.
Top 8 Ways to Finance a Restaurant Business
Here are the top financing options for restaurant owners:
Equipment financing – With this loan, you can buy the equipment to improve your restaurant or make any large equipment purchases.
SBA loan – This loan offers lower interest rates and longer repayment terms than other types of small business financing.
Business line of credit – Allows you to draw on the funds, pay them back, then use them again. You only pay interest on the amount you use.
Startup business loan – This is a loan you can take before you open a restaurant, as you don’t need to have a business to qualify.
Invoice factoring – The lender provides a lump sum of about 80% of the invoice value, and they then collect the money from the original owners. It is beneficial for restaurants that rent out their space and get late payments.
Unsecured business loan – The unsecured loan does not require any collateral, and it is usually followed by a more significant risk and higher interest rates.
Commercial real estate loan – A commercial real estate loan is used if you need to renovate your existing space or purchase another building to expand your business.
Merchant cash advance – This is the last resort when it comes to restaurant financing. The MCA is paid back with a percentage from future credit/debit card transactions, and the repayment terms last until the whole loan is paid off. A merchant cash advance is one of the most expensive forms of borrowing for restaurant owners.
Applying for a Restaurant Loan
The process of applying for a small business loan as a restaurant owner is similar to any other small business loan. Here is what you need to consider prior to applying for small business loans for restaurants:
Ensure you have a credit score of at least 600, preferably 680.
Ensure you have annual revenue of at least $100,000.
Ensure all your legal and financial documents are in order.
Financial documents include your business plan, financial statements, tax returns, collateral, and any legal business documents, among others.
These are the basics. To increase your credit score, the most important thing you can do is pay all of your bills on time and ensure you don’t max out your credit cards. Your rating will rise with time as long as you are responsible for the repayment schedule.
Having access to working capital can empower your restaurant to go further, whether that’s by hiring more staff, investing in restaurant equipment that makes it easier to serve customers, or expanding to another location. A restaurant business loan can help your business meet those needs, allowing you to focus on the day-to-day operations of running your restaurant.
Frequently Asked Questions(FAQ)
Do Banks Give Loans for Restaurants?
Any restaurant that is up and running can get a business
loan through a bank if they meet the bank’s qualifications. It typically takes
longer to get financing for restaurants from a bank than an online lender,
though, so keep that in mind when deciding.
Is It Hard to Get a Loan for a Restaurant?
Assuming you meet the minimum requirements of credit score
and annual revenue, getting a business loan for a restaurant is no different
than any other type of small business wanting a loan.
Can I Get a Loan to Buy a Restaurant?
You can use a restaurant loan for short-term or long-term
business requirements, including purchasing a property. Bank loans, SBA loans,
secured loans, credit loans, and equipment financing are funding options
available for purchasing a restaurant.
Can I Get a Restaurant Business Loan With Bad Credit?
Yes, certain online lenders offer funding for restaurants
even if credit is less-than-ideal. You will be subject to higher rates and
Why Do You Need a Restaurant Business Loan?
There are many uses for a restaurant loan, including
purchasing equipment, paying salaries, opening another location, or even paying
for the daily expenses that come with running a restaurant. Small business
loans for restaurants can help pay these costs.
Can I Get an SBA Loan for a Restaurant?
Yes. If you fulfill the qualifying conditions, getting an
SBA (7)(a) loan is among the best options. The SBA (7)(a) is a small business
loan that helps businesses with many expenses, including real estate, working
capital, and equipment.