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Top 8 Financing & Business Loan Options For Restaurants

Finding loans to open a restaurant might be difficult but not impossible. Check out our list of the top alternative lenders for restaurant loans.

    Chris Motola
  • UPDATED

Advertiser Disclosure: Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity.

Getting approved for financing for restaurants can be challenging, but working with the right lender can get you the money you need to finance a restaurant.

Do you want to know how to get restaurant financing or a loan to open a restaurant? Below, we’ll look at how to finance your restaurant with working capital. For restaurant owners specifically looking to finance restaurant equipment, we have a companion post on restaurant equipment leasing.

Learn More About Our Top Picks

CompanySummaryNext StepsSummary
Lendio

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Lendio is an online lending platform that matches businesses with lending partners.
Lendio is an online lending platform that matches businesses with lending partners.

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OnDeck

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OnDeck is a solid choice for established borrowers with fair credit (625+) and decent cash flow.
OnDeck is a solid choice for established borrowers with fair credit (625+) and decent cash flow.

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LoanBuilder

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LoanBuilder gives you the freedom to tweak the terms of a short-term loan to your liking.
LoanBuilder gives you the freedom to tweak the terms of a short-term loan to your liking.

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Kabbage Loans

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Kabbage is known for flexible line-of-credit-like loans.
Kabbage is known for flexible line-of-credit-like loans.

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Currency

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Currency offers loans to finance kitchen equipment.
Currency offers loans to finance kitchen equipment.

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SmartBiz

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SmartBiz connects you to SBA loan opportunities.
SmartBiz connects you to SBA loan opportunities.

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US Business Funding

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US Business Funding can accommodate high loan amounts.
US Business Funding can accommodate high loan amounts.

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Accion

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Accion provides loans to businesses with bad credit.
Accion provides loans to businesses with bad credit.

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Read more below to learn why we chose these options.

What Financing Options Are Available For Restaurants?

Restaurants can access most of the same financing options as other small businesses. These include:

  • Traditional Bank Term Loans: Banks offer great terms and rates for businesses. However, they also tend to be more selective about who they lend to. Expect higher credit score requirements and to have been in business at least two years prior to application.
  • Kitchen Equipment Financing: Many lenders offer equipment loans for restaurants. Equipment loans are used strictly to acquire tangible assets (such as kitchen equipment). The equipment then becomes collateral for the loan.
  • Merchant Cash Advance: Merchant cash advances loosely resemble loans, but the funder is actually buying a percentage of your future credit card sales. Merchant cash advances are easy to qualify for and quick; however, their rates can be extremely high.
  • Business Line Of Credit: Lines of credit are a flexible alternative to loans. Instead of getting a lump sum, the borrower is extended a credit limit that can be drawn upon as needed for an agreed-upon amount of time.
  • Alternative Restaurant Financing: Alternative financing simply refers to financing from non-bank lenders. It offers many of the same products as banks but tends to favor speed and access over low rates and longer-term lengths.
  • Crowdfunding Restaurant Loans: Crowdfunded loans are a niche form of lending that raises part or all of the funds for the loan from a crowdfunding campaign. These loans generally have very low or no interest rates.
  • Startup Loans To Open A Restaurant: Startup loans generally leverage the business owner’s personal credit and borrower profile to finance a business with little to no history.

What About SBA Business Loans For Restaurants?

Restaurants can apply for SBA loans through a qualified SBA lender. SBA loans have favorable rates and term lengths but be prepared for a lengthy application process.

The 8 Best Restaurant Business Loans

To help cover a broad range of circumstances, we’ve put together this list of the best restaurant business loans we’ve reviewed: Lendio, OnDeck, LoanBuilder, Kabbage, Currency Finance, SmartBiz, US Business Funding, and Accion.

1. Lendio: Best Restaurant Loan Marketplace

Lendio


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Pros

  • Multiple types of financing are available
  • High borrowing amounts
  • Long-term financing options available
  • A fast & easy application process

Cons

  • Rates can be expensive
  • Funds take a while to disburse

Lendio is an online lending platform that matches businesses with lending partners. This is a handy service for restaurant owners who don’t have a lot of time to compare loans on their own or who have bad credit.

As online lenders go, Lendio is on the slow side. The company promises results within 72 hours, which admittedly isn’t a terribly long time, but if you need money immediately, it may make more sense to apply directly to a lender.

Lendio Features

Through its partnered lenders, Lendio offers:

  • Short-term loans
  • Term loans
  • Merchant cash advances
  • Lines of credit
  • SBA loans
  • Equipment financing

Where Lendio Really Shines For Restaurants

Aside from the convenience of applying to multiple lenders with a single application, Lendio’s pool of potential lenders is big enough that you’re more likely than not to find one willing to work with you, even if you haven’t been in business very long. Lendio’s customer service is also above average, so you can expect the company to do its best to find you a decent match.

Get Started With Lendio

Read our in-depth review

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2. OnDeck: Best For Established Restaurants

OnDeck


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Pros

  • Multiple types of available financing
  • Lower costs for repeat customers
  • A fast & easy application process
  • Funds are disbursed quickly

Cons

  • Not available in some states
  • Rates can be expensive

OnDeck is one of the bigger names in alternative online lending and a solid choice for borrowers with fair credit (625+) and decent cash flow. Just be aware that its factor rates use a per-month formula rather than a flat fee, making it difficult to compare to many of its competitors.

OnDeck Features

OnDeck offers:

  • Term loans
  • Lines of credit

Overall, the lines of credit are usually a better deal so far as rates go, with an average APR of 48.9% vs. 62.1% (based on loans originated in the half-year ending March 31, 2022).

Where OnDeck Really Shines For Restaurants

OnDeck is known for processing applications very quickly; you’ll usually know if you’ve been approved that day and, if successful, should have your money within a day or two. Repeat customers will be offered better rates, something you like to see in an alternative lender that has been around as long as OnDeck.

Get Started With OnDeck

Read our in-depth review

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3. LoanBuilder: Best For Fast Application Process

LoanBuilder


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Pros

  • No extra fees
  • A fast & easy application process
  • Funds get disbursed quickly

Cons

  • No discounts for early repayment
  • No long-term financing options

LoanBuilder doesn’t offer as many products as some of the other lenders on the list, but it does give you the freedom to tweak the terms of a short-term loan to your liking. Combined with relatively low qualifications and integration with PayPal’s infrastructure, and you’ll find one of the more painless application processes in the industry.

LoanBuilder Features

LoanBuilder offers short-term loans.

Where LoanBuilder Really Shines For Restaurants

LoanBuilder charges a flat rate between 2.9% and 18.72% of the amount you borrow, and unlike many alternative lenders, it’s the only fee it charges. With the ability to borrow up to $500,000, LoanBuilder can potentially cover most of the costs you’ll run into so long as you can meet the fast 13-52-week repayment schedule.

Get Started With LoanBuilder

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4. Kabbage: Best Line Of Credit

Kabbage Loans


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Pros

  • Reasonable borrower qualifications
  • No added fees
  • No early repayment penalty

Cons

  • Rates can be expensive
  • No long-term financing options
  • Low borrowing amounts

Kabbage is known for its fast application process and flexible lines of credit. You can borrow up to $250,000 through Kabbage, with draw lengths of six, 12, or 18 months. You’ll repay a fraction of the principal you’ve drawn plus a fee each month.

Kabbage Features

Kabbage offers lines of credit and some limited banking services.

Where Kabbage Really Shines For Restaurants

Kabbage’s fee structure is fairly straightforward, and the company takes pains to ensure you have all the information you need to make an informed decision about its product. You can also prefigure your costs using the online loan calculator. That said, Kabbage isn’t cheap, so you’ll want to make sure it’s the best deal you can get under your current circumstances.

Get Started With Kabbage Loans

Read our in-depth review

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5. Currency Finance: Best For Kitchen Equipment Financing

Currency


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Pros

  • Long-term financing options available
  • No prepayment penalties
  • Low credit score requirements

Cons

  • Funds can take a while to disburse
  • Website advertising is not informative
  • Customer service is inconsistent

If you’re looking to finance kitchen equipment, it’s worth looking at Currency. Currency doesn’t typically originate loans or leases; instead, it offers them through one of its many partner lenders. Currency is similar to Lendio but more focused on equipment financing.

Currency Finance Features

Currency Finance offers equipment financing through its partners.

Where Currency Finance Really Shines For Restaurants

Interest rates and fees vary by the lender you’re paired with, but you can expect them to fall between 6% and 24%, which is quite reasonable. The ability to shop multiple equipment lenders with one application is also very convenient.

Get Started With Currency

Read our in-depth review

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6. SmartBiz: Best For SBA Loans

SmartBiz


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Pros

  • Rates tend to be inexpensive
  • No prepayment penalties
  • Excellent customer service

Cons

  • Slow application process
  • Some additional fees charged

SmartBiz doesn’t originate loans but hooks clients up with a member of its SBA-approved lending network.

SmartBiz Features

SmartBiz offers the following through its bank partners:

  • SBA 7(a) loans
  • SBA 504 loans
  • Terms loans

Where SmartBiz Really Shines For Restaurants

For those interested in SBA loans but overwhelmed by the onerous process of applying for them, SmartBiz can help you have your cake and eat it too. One of the more useful services SmartBiz offers is evaluating your candidacy for an SBA loan before you waste time filling out the mountains of paperwork that go into approval.

To qualify, you’ll need a personal credit score of at least 650 and a business credit score of at least 140.

Get Started With SmartBiz

Read our in-depth review

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7. US Business Funding: Best For High Borrowing Amounts

US Business Funding


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Pros

  • Relaxed qualifications
  • Multiple types of available financing
  • High borrowing amounts
  • Funds are disbursed quickly

Cons

  • Rates can be expensive
  • Some additional fees charged

US Business Funding is a competitive alternative lender that offers a wide variety of loans and loan-adjacent services.

US Business Funding Features

US Business Funding offers:

  • Equipment financing
  • Working capital loans
  • SBA Loans

Interest rates start at 3.5%.

Where US Business Funding Really Shines For Restaurants

US Business Funding deemphasizes credit scores and revenue in its approval process (they’re still used, just not stringently), making the lender accessible to more businesses. Despite that, the lender’s interest rates are quite competitive as alternative lenders go. And if you don’t mind a slightly longer application process, US Business Funding can provide up to $10 million in financing, which may make it a good bank alternative for larger businesses.

Get Started With US Business Funding

Read our in-depth review

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8. Accion: Best For Bad Credit

Accion


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Pros

  • Relaxed borrower qualifications
  • Monthly repayments
  • No prepayment penalty

Cons

  • Rates can be expensive
  • Some additional fees charged
  • Limited availability in some states

Accion offers loans to businesses traditionally underserved by mainstream finance, including those with bad credit, minority-owned businesses, veteran-owned businesses, and women-owned businesses.

Accion Features

Accion offers term loans with fixed APRs ranging from 4% to 16.99%. The exact terms of the loans may vary depending on your business type and location.

Loans are unavailable in Montana, North Dakota, South Dakota, Tennessee, or Vermont.

Where Accion Really Shines For Restaurants

The high-risk profile of restaurants may scare lenders away, especially if the borrower isn’t well-established or has poor credit. Accion is one of the better ways for underserved businesses to get funding without completely getting hosed on interest rates.

Get Started With Accion

Read our in-depth review

Jump back to comparison chart

Why Are Restaurant Loans Hard To Get?

On paper, it’s rare to find a lender that absolutely will not finance restaurants. In practice, however, traditional lenders may be reluctant to lend to small businesses (which includes the vast majority of restaurants) or may find the restaurant industry too risky to lend to unproven businesses.

Another issue is that, given the speed at which many traditional lenders operate, you may not be able to get financing on the time scale that you need it. If a vital piece of equipment in your kitchen breaks down or needs to be replaced, your business may not be able to survive a long interruption.

Improve your chances of getting financing by following the advice below.

How To Improve Your Chances Of Being Approved

While getting financing can be challenging, you can take several steps to increase your chances of being approved.

Understand Your Finances

Knowing precisely how much money your business needs to function (costs, revenue, etc.) removes a lot of the uncertainty from your business and makes it easier to ask for a reasonable amount of money from your prospective lender. It can also help you avoid needing financing in the first place.

Choosing the right accounting software can make this process a lot easier.

Make A Business Plan

Making a business plan isn’t just a way to outline your goals and vision for your business. It’s also a way to signal prospective lenders that you’re playing for keeps. Showing that you’ve isolated a target market and have a good sense of your competition can demonstrate that you aren’t being overly optimistic about your ability to repay your loans.

Not every lender will ask to see one, but it never hurts to have one on standby.

If the task of writing a business plan sounds daunting, keep in mind that you don’t necessarily have to write a tome. Start with a one-page business plan, which is both less daunting to write and easier for others to read.

Pick The Right Lender

If you’ve made it this far through the post, you probably have a sense of the types of financing available to you. Time is a resource, and you don’t want to waste it applying for financial products you won’t qualify for. You also don’t want to get stuck with a loan that’s a bad fit for your business.

If you’ve been around for a while and built strong business relationships with your local banking institutions, you’ll have a much easier time qualifying for traditional lending (and the better rates that go with it). Newer restaurants, or those that need money very quickly, may need to turn to the alternative lending market.

Pick a lender that:

  • Works with businesses in your credit range
  • Works with businesses of a similar age
  • Offers a product that can deliver money to you when you need it
  • Offers a product that you can reasonably repay within its term length
  • Offers the type of product you’re looking for (short-term loan, line of credit, equipment financing, etc.)
  • Offers you the best rate your circumstances will allow

Be Prepared With The Right Documents

As you might expect, most lenders aren’t just going to throw money at everyone who shows up at their front door. They will want to confirm you are who you say you are and that you’re a reasonable risk.

Not every lender requires the same documents to apply for a loan, but you can save yourself some grief by knowing and being able to verify the following:

  • A brief explanation of what you need the loan for
  • Your personal credit score
  • Your business’s starting date
  • Your monthly and annual revenue
  • Bank statements (typically three months’ worth)
  • Current debt obligations (other loans you’re paying back, etc.)
  • Proof of ownership

What Do Most Restaurant Loans Expect In Return Percentage?

Interest rates on loans can vary substantially depending on the following factors:

  • Your credit rating
  • The lender you apply to
  • The type of funding you apply for
  • The term length of the loan you receive
  • Your time in business
  • The current prime interest rate

Small business loan APRs currently range from 3.19% to 99%. Bank loans trend toward the lower end of that range, while high-risk alternative products, such as merchant cash advances, will trend toward the higher end.

Final Thoughts: Which Restaurant Loan Is Right For Your Business?

Financing for restaurants is available to most businesses seeking it, but you may have to do your due diligence to find a loan that fits your needs at a rate you can afford.

If you didn’t find what you were looking for in our examples above, don’t fret! We’ve barely scratched the surface of the resources restaurants can tap to find funding. If you don’t have much collateral, you can try to get an unsecured business loan from one of our top vendors. If you’re looking to finance restaurant equipment, check out our list of the best leasing and equipment lenders.

Good luck hunting for restaurant business loans! Do your research, and you’re sure to find something that fits your needs.

FAQs: Restaurant Business Loans

How much loan funding can you get for a restaurant?

The amount of money you can borrow with a restaurant loan will depend on the lender and your profile as a borrower, particularly with regard to your revenue. It is theoretically possible for a restaurant to borrow millions of dollars, though the average business will qualify for far less.

How do restaurants get credit?

Restaurants can get credit lines by applying to lenders offering small business lines of credit. These include companies such as Kabbage and OnDeck.

Where can I get loans for a small restaurant startup?

In many cases, the easiest way to get a loan for a restaurant startup is to take out a personal loan. You can also try specialized lenders, such as Accion.

What credit score do you need to buy a restaurant?

There’s no specific credit score needed to buy a restaurant. However, you will have an easier time finding financing with higher credit scores. A score above 600 is helpful.

Which bank loan is best for a restaurant?

The best bank loan for a restaurant is the one the restaurant can get. That typically means working with the bank that handles your business and checking accounts.

Which bank is best for a commercial loan?

Large national banks such as Chase and Wells Fargo can easily service most commercial needs. That said, there are advantages to working with your local community bank.

How do you get a bank loan to open a restaurant?

When it comes to bank loans, it’s usually best to start with the bank that services your business accounts. You can speak with a representative at your local branch about what types of business financing they offer.

In Summary: The 8 Best Restaurant Business Loans

  1. Lendio: Lendio is an online lending platform that matches businesses with lending partners.
  2. OnDeck: OnDeck is a solid choice for established borrowers with fair credit (625+) and decent cash flow.
  3. LoanBuilder: LoanBuilder gives you the freedom to tweak the terms of a short-term loan to your liking.
  4. Kabbage Loans: Kabbage is known for flexible line-of-credit-like loans.
  5. Currency: Currency offers loans to finance kitchen equipment.
  6. SmartBiz: SmartBiz connects you to SBA loan opportunities.
  7. US Business Funding: US Business Funding can accommodate high loan amounts.
  8. Accion: Accion provides loans to businesses with bad credit.
Chris Motola

Chris Motola

Expert Analyst & Reviewer at Merchant Maverick
An expert in personal and business loans and financial health, Chris Motola has been writing about small business finance and payments for over 5 years. He has been cited in various industry publications, including Forbes Advisor, GoBankingRates, and Medium. Chris is a graduate of the University of Central Florida.
Chris Motola
View Chris Motola's professional experience on LinkedIn.

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Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.

Our unbiased reviews and content are supported in part by affiliate partnerships, and we adhere to strict guidelines to preserve editorial integrity. The editorial content on this page is not provided by any of the companies mentioned and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author’s alone.

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