Are you an aspiring restaurateur with big dreams but limited financial resources? Look no further. In this comprehensive guide, we unveil the secrets to accessing restaurant grants, an invaluable source of funding for your new culinary venture.
From understanding the application process to maximizing your chances of approval, we’ve got you covered. Get ready to embark on your entrepreneurial journey with confidence and unlock the doors to financial success in the restaurant industry.
Four Types of Restaurant Loans
When it comes to restaurant financing, you’ll encounter a range of loan types. From equipment loans to working capital loans, inventory financing to lines of credit, the options can seem overwhelming.
Exploring the pros and cons of various loan types will empower you to make an informed decision and secure the financing solution that will propel your restaurant to success.
Type 1: Equipment Loans
As someone who operates a restaurant, you are well aware of the substantial financial commitment necessary for acquiring high-quality equipment.
The expenses associated with purchasing new ovens and stovetops can quickly add up, placing a burden on your financial resources. Introducing restaurant equipment financing — an ideal solution to acquire the essential capital for your restaurant’s equipment needs.
With this specialized loan, you can finance up to 100% of the equipment’s value, allowing you to modernize your kitchen without depleting your savings.
Type 2: Working Capital Loans
Ideal for swiftly covering expenses and maintaining the smooth operation of your establishment, working capital loans offer unparalleled flexibility.
Whether it’s managing inventory, meeting payroll demands, or seizing growth opportunities, these loans have you covered. With maximum loan amounts typically reaching up to $250,000, you can secure the necessary funds with an unnecessary delay.
Type 3: Inventory Financing
Like equipment financing, inventory financing revolves around a fundamental concept — the inventory itself serves as collateral. By leveraging this specialized financing, you gain the financial means to acquire the necessary stock for your restaurant’s smooth operation and expansion.
Type 4: Lines of Credit
This versatile funding solution grants you access to a predetermined pool of funds that you can tap into whenever the need arises, providing unparalleled flexibility and convenience. With a line of credit, you only incur interest on the specific amount you draw for your restaurant’s funding requirements.
Once you repay the drawn amount, your credit line is automatically replenished to its original limit, ready to serve your future financial needs.
Restaurant Financing
Financing your new restaurant premises with a bank loan? Need to balance the books to budget for your future restaurant expenses, wages and tax? You'll be a restaurant financial wizard by the time you've read this.
WHAT YOU'LL LEARN...
- Restaurant Grants and Loans: Guide to Restaurant Funding
- Complete Guide to Increase Restaurant Profit Margins
- Buying a Restaurant: Research, Costs and Due Diligence
- Restaurant Bookkeeping: Guide for New Restaurant Owners
- Restaurant Business Loans: 7 Tips Before You Apply
- Restaurant Menu Pricing: How to Price a Menu (+ Examples)
- Restaurant Budgeting: Guide to Create & Balance a Budget
14 Top Restaurant Business Loans
1. Apple Pie Capital: Best for Franchise Financing
Apple Pie Capital specializes in providing the franchise financing you need to propel your restaurant to new heights. With a range of loan options available, Apple Pie Capital ensures flexibility to meet your specific needs. Their monthly repayment schedules offer convenience and ease of budgeting.
Apple Pie Capital empowers you to utilize the proceeds for various purposes, from acquiring your first franchise to expanding into multiple units, undertaking remodeling projects, or purchasing existing franchise locations.
| Term Length | 5 to 10 years |
|---|---|
| Max Amount | No hard limit |
| Est. Interest Rate | 7.75% to 12% |
| Min. Credit Score | 700 |
| Min. Time in Business | 12 months |
| Time to Funding | 1 to 3 days |
Pros vs Cons
| Pros | Cons |
|---|---|
| Provides loans to franchises: Not all lenders will provide loans for franchise restaurants, but Apple Pie Capital is known for its franchise loans. | Must have a FICO score of at least 700: Apple Pie Capital requires a higher FICO score than many other lenders. |
| Doesn’t have prepayment penalties: Apple Pie Capital does not add on penalties for paying off your loan early. | Minimum loan amount of $100,000: Apple Pie Capital franchise loans begin at $100,000, which might be more than needed. |
| Provides both fixed and variable competitive rates: With Apple Pie Capital, you can choose if you want to go for a fixed or variable rate on your loan. | Requires restaurant to have been open for 12 months: You cannot get approved for a loan through Apple Pie Capital without having the restaurant open for at least 12 months. Apple Pie Capital franchise loans begin at $100,000, which might be more than needed. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| N/a | A+ | N/a |
Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites. N/a means that no reviews exist at the time of publication.
How to Qualify for a Loan from Apple Pie Capital
Apple Pie Capital’s minimum requirements include:
- Minimum FICO credit score of 700
- In business for at least 12 months
- Requires a 5- to 10-year term range
- Loan amount must be more than $100,000
How to Apply
Apply online, or call 800-720-0241 to speak with a representative from Apple Pie Capital about the application process.
2. ARF Financial: Best for Short-Term Loans
ARF Financial is a lending institution that possesses a deep understanding of the distinctive demands faced by individuals in the food services sector. Their financing solutions encompass various options such as working capital loans, lines of credit, commercial bridge loans, and equipment financing.
| Term Length | 12 to 36 months |
|---|---|
| Max Amount | $1,000,000 |
| Est. Interest Rate | 3.85% to 15% |
| Min. Credit Score | 551 |
| Min. Time in Business | 30 days |
| Time to Funding | 3 to 5 business days |
Pros vs Cons
| Pros | Cons |
|---|---|
| Provides quick approvals: With ARF Financial, you can get your loan approved in as little as 3 days. | Has a hard loan limit: ARF Financial does not provide loans of more than $1,000,000. |
| Doesn’t require collateral for loans up to $500,000: With ARF Financial, you can secure a loan up to $500,000 without collateral. | Only provides loans for 12 to 36-month terms: ARF Financial only provides loans for 12 to 36 months, which can be difficult if a longer term is required. |
| Quick loan approvals: ARF Financial can approve a loan in as little as 3 days. | Doesn’t provide a definitive interest rate: The interest rate they offer varies drastically between clients. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| 4.9 / 5 | NR | 1.7 / 5 |
Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites. NR indicates that this establishment is presently unrated as it has operated for a duration of less than six months, lacking a substantial history for BBB to assess and assign a rating.
How to Qualify for a Loan from ARF Financial
ARF Financial’s minimum requirements include the following:
- Minimum FICO credit score of 551
- In business for at least 30 days
- Requires a 12 to 36-month term range
- Loan amount must be less than $1,000,000
How to Apply
Apply online, or call 866-702-4430 to speak with a representative from ARF Financial about the application process.
3. Balboa Capital: Best for Franchise Financing Options
Regarding franchise financing, Balboa Capital stands out as a trusted lender. Experience the convenience of Balboa Capital’s streamlined process, with minimal paperwork and a focus on considering all credit profiles.
Their commitment to efficiency is evident as they strive to decide on your loan application in as little as one hour. In most cases, Balboa Capital can finance its restaurant loans within just a few days, ensuring swift access to the funding you need.
| Term Length | 24 to 72 months |
|---|---|
| Max Amount | $500,000 for commercial loans and $300,000 for franchise loans. |
| Est. Interest Rate | Varies by customer |
| Min. Credit Score | 620 |
| Min. Time in Business | 1 Year |
| Time to Funding | Same day as approval |
Pros vs Cons
| Pros | Cons |
|---|---|
| Provides quick approvals: You can receive same day approval from Balboa Financial. | Requires a higher FICO credit score: When applying for a loan with Balboa Financial, you will require a FICO credit score of at least 620. |
| Can provide special franchise loans: With Balboa Financial, you can get a franchise loan that is tailored to owners of franchise restaurants. | Requires a minimum annual revenue: Balboa Financial requires that your restaurant earns at least $100,000 in annual revenue. |
| Has an easy online application: You can apply for a loan with Balboa Financial by filling out a simple application online. | Only provides loans up to $300,000 for franchises: They only offer loans up to $300,000, which is lower than some other lenders. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| 3.6 / 5 | 1 / 5 | 3.6 / 5 |
Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites.
How to Qualify for a Loan from Balboa Financial
Balboa Financial's minimum requirements include the following:
- Must have two years of fiscal year tax returns
- Have a FICO credit score of at least 620
- Business must have been open for at least 1 year
- Business must generate at least $100,000 annual revenue
How to Apply
Apply online, or call 888-225-2621 to speak with a representative from Balboa Capital about the application process.
4. CAN Capital: Best for Small Business Loans
CAN Capital, though not specializing in restaurant financing, offers a convenient avenue for small business owners seeking flexible funding options. With CAN Capital, applying for a merchant cash advance or a short-term restaurant loan becomes hassle-free, enabling you to pursue expansion, remodeling, equipment financing, or working capital for your restaurant.
| Term Length | 6 to 24 months |
|---|---|
| Max Amount | $250,000 |
| Est. Interest Rate | 29.9% |
| Min. Credit Score | 600 |
| Min. Time in Business | 3 years |
| Time to Funding | Less than a week |
Pros vs Cons
| Pros | Cons |
|---|---|
| Provides quick approvals: You can get approved for a loan from CAN Capital in less than a week. | Requires a higher FICO credit score: CAN Capital requires you to have a FICO credit score of at least 600 to receive a loan. |
| Can provide short-term to medium loan terms: CAN Capital provides loan terms from 6 to 24 months. | Has high-interest rates: CAN Capital has high-interest rates that are estimated around 29.9%. |
| Provides different types of loans: CAN Capital provides equipment financing and other loans, like working capital loans. | Only provides loans up to $250,000: CAN Capital only provides loan amounts up to $250,000. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| 4.9 / 5 | 1 / 5 | 4.3 / 5 |
Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites.
How to Qualify
CAN Capital’s minimum requirements include the following:
- Must have two years of fiscal year tax returns
- Have a FICO credit score of at least 620
- Business must have been open for at least 3 years
- Business must generate at least $300,000 annual revenue
How to Apply
Apply online, or call 877-550-4731 to speak with a representative from CAN Capital about the application process.
5. eBusiness Funding: Best for Merchant Cash Advances
With a dedicated focus on restaurant loans, eBusiness Funding understands the unique challenges faced by this industry and is here to assist you in achieving your goals. Their streamlined process ensures that eligible restaurants can benefit from our merchant cash advances.
| Term Length | 6 to 24 months |
|---|---|
| Max Amount | $500,000 |
| Est. Interest Rate | 17% |
| Min. Credit Score | 550 |
| Min. Time in Business | 6 months |
| Time to Funding | Approximately 72 hours |
Pros vs Cons
| Pros | Cons |
|---|---|
| Provides quick approvals: eBusiness Funding can approve your loan within 72 hours, but generally, they take less than 24 hours. | Mainly provide merchant cash advances: Although eBusiness does provide some loan options, they are best known for merchant cash advances. |
| Only requires you to be in business for 6 months: eBusiness Funding has a shorter time required for you to have opened your restaurant than other lenders. | Requires a higher interest rate: Unlike some lenders, eBusiness does require a higher interest rate on the loans they provide. |
| Requires a lower FICO credit score: More people can get approved by eBusiness funding with a lower credit score than with other lenders. | Only offers loans up to $500,000: eBusiness Funding offers loans up to $500,000 based on the amount of time and monthly revenue that the restaurant has. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| N/a | N/a | N/a |
Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites. N/a means that no reviews exist at the time of publication.
How to Qualify for a Merchant Cash Advance from eBusiness Funding
EBusiness Funding's minimum requirements include the following:
- Must have a business account for daily payments
- Have a FICO credit score of at least 550
- Business must have been open for at least 6 months
- Business must generate at least $10,000 monthly revenue
How to Apply
Apply online or call 855-221-6696 to speak with a representative from eBusiness Funding about the application process.
6. Fora Financial: Best for Working Capital Loans
Fora Financial stands as a reliable ally, dedicated to offering working capital loans specifically designed to help small businesses, including enthusiastic restaurant proprietors like yourself.
The true advantage of Fora Financial's working capital loans lies in their adaptability. You are unrestricted in your utilization of the funds, granting you the freedom to invest in whatever resources your restaurant needs to prosper.
| Term Length | Up to 15 months |
|---|---|
| Max Amount | $1,500,000 |
| Est. Interest Rate | Factor rates from 1.10 to 1.40 |
| Min. Credit Score | 500 |
| Min. Time in Business | 6 months |
| Time to Funding | 24 – 48 hours |
Pros vs Cons
| Pros | Cons |
|---|---|
| Minimum FICO credit score of 500: Fora Financial only requires a minimum FICO credit score of 500. | Has a processing fee of 2.5% or higher: Fora Financial has a higher processing fee than many other lenders. |
| Provides fast approval and funding: Fora Financial can approve your loan within 48 hours of filing your application. | Has short repayment periods: Fora Financial requires loans to be repaid faster than some other lenders. |
| Allows for savings for early payback: Fora Financial doesn’t have penalties for early repayment. | Has potential high borrowing costs: Fora Financial could potentially have higher borrowing costs than some other lenders. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| 4.3 / 5 | 2.36 / 5 | 4.5 / 5 |
Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites.
How to Qualify for a Loan from Fora Financial
Fora Financial's minimum requirements include the following:
- Minimum FICO credit score of 500
- No open bankruptcies
- Must be in business for at least 3 months
- Have at least $12,000 per month in gross sales
How to Apply
Apply online, or call 877-419-3568 to speak with a representative from Fora Financial about the application process.
7. OnDeck: Best for Short-Term Loans
OnDeck presents short-term loan solutions along with lines of credit. While they may not specifically offer a dedicated restaurant loan product, they remain an excellent choice for fulfilling your restaurant’s financing needs. Whether you have upcoming smaller, short-term purchases or other financial requirements for your restaurant, OnDeck is well-equipped to support you.
| Term Length | Up to 24 months |
|---|---|
| Max Amount | $250,000 |
| Est. Interest Rate | Starting at 35.40% APR |
| Min. Credit Score | 625 |
| Min. Time in Business | 12 months |
| Time to Funding | Same day |
Pros vs Cons
| Pros | Cons |
|---|---|
| Provides fast approval time: OnDeck is capable of approving loans on the same day of the application. | Has a high starting APR rate: OnDeck does require an estimated 35.40% APR on their loan approvals. |
| Has short-term length loans: OnDeck provides different term lengths of up to 24 months for repaying loans. | Requires a higher FICO credit score: OnDeck does require you to have a FICO credit score of at least 625 to be approved. |
| Has an easy application process: OnDeck uses a fast and easy-to-fill-out application for their loan process. | Low maximum loan amount: OnDeck only provides loans up to $250,000 for qualified individuals. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| 4.75 / 5 | 3.54 / 5 | 4.8 / 5 |
Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites.
How to Qualify for a Loan from OnDeck
OnDeck's minimum requirements include the following:
- Minimum FICO credit score of 625
- Must have a business bank account
- Must be in business for at least 12 months
- Have at $100,000 annual revenue
How to Apply
Apply online or call 888-269-4246 to speak with a representative from OnDeck about the application process.
8. Fundbox: Best for Quick Approvals
Fundbox distinguishes itself through its remarkably swift approval process, delivering a decision on your application in a matter of minutes. Their efficient procedures and clear-cut conditions simplify your financial experience, enabling you to concentrate on the primary objective: the success of your restaurant.
| Term Length | 12 to 24 weeks |
|---|---|
| Max Amount | $150,000 |
| Est. Interest Rate | 4.66% for 12-week term; 8.99% for 24-week term |
| Min. Credit Score | 600 |
| Min. Time in Business | 6 months |
| Time to Funding | Next business day |
Pros vs Cons
| Pros | Cons |
|---|---|
| Doesn't have any hidden fees: Fundbox doesn’t have any hidden fees associated with their loans. | Requires a $100,000 annual gross revenue: Fundbox will not approve a loan unless you can provide proof of at least $100,000 annual revenue. |
| Only pay interest on used amount: Fundbox only requires that you pay interest on the money that is used, not the entire loan. | Doesn't provide loans over $150,000: Fundbox doesn’t have higher loan amounts available than $150,000. |
| Provides weekly term lengths: Fundbox provides loan terms of 12 to 24 weeks when needed. | Medium FICO credit score requirement: Fundbox requires you to have a credit score of at least 600. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| 4.5 / 5 | 4.76 / 5 | 4.9 / 5 |
Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites.
How to Qualify for a Loan from Fundbox
Fundbox’s minimum requirements include the following:
- Minimum FICO credit score of 600
- Must have a business bank account
- Must be in business for at least 6 months
- Have at $100,000 annual revenue
How to Apply
Apply online or call 855-262-5307 to speak with a representative from Fundbox about the application process.
9. Funding Circle: Best for Established Restaurants
While Funding Circle doesn’t offer a specific restaurant financing product, its term loan serves as an excellent solution for ambitious restauranteurs seeking significant financial support. Compared to traditional bank loans, Funding Circle’s application process is streamlined, and funding is expedited, ensuring you can access the capital you need without unnecessary delays.
| Term Length | 6 to 84 months |
|---|---|
| Max Amount | $500,000 |
| Est. Interest Rate | 12.45% to 40.51% |
| Min. Credit Score | 660 |
| Min. Time in Business | 2 years |
| Time to Funding | 3 days |
Pros vs Cons
| Pros | Cons |
|---|---|
| Helps businesses build their credit: Funding Circle designs its loans to be able to help business owners build their business credit. | Doesn’t provide loans in all states: Funding Circle is not capable of providing loans for restaurant owners who reside in Nevada. |
| Provides fixed interest rates and monthly payments: Funding Circle designs their loans with a fixed interest rate and monthly payment system to make repayment easier. | Lack of interest rates transparency: Funding Circle is not upfront about the interest rates that it charges in the long run. |
| Provides fast approval time: Funding Circle can approve a loan within three days. | Medium FICO credit score requirement: Funding Circle requires you to have a credit score of at least 660. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| 4.6 / 5 | 1.07 / 5 | 1.1 / 5 |
Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites.
How to Qualify for a Loan from Funding Circle
Funding Circle’s minimum requirements include the following:
- Minimum personal FICO credit score of 660
- No personal bankruptcies for at least 7 years
- Must be in business for at least 2 years
- Have at $50,000 annual revenue
How to Apply
Apply online, or call 855-385-5356 to speak with a representative from Funding Circle about the application process.
With Taycor Financial, you can secure equipment financing. Enjoy the flexible payment options, including deferred and semiannual payments, ensuring that your cash flow remains optimized while you equip your establishment for success.
| Term Length | 12 to 84 months |
|---|---|
| Max Amount | $2,000,000; $400,000 for equipment financing |
| Est. Interest Rate | Starting at 3.49% |
| Min. Credit Score | 550 |
| Min. Time in Business | 2 years |
| Time to Funding | 4 to 24 hours |
Pros vs Cons
| Pros | Cons |
|---|---|
| Provides various loan types: Taycor has an array of loan options and lines of credit available for their clients. | Requires the business to have been open for at least 2 years: Taycor will not approve a loan for a company that hasn’t been open at least 2 years. |
| Doesn’t require a minimum revenue requirement: Taycor does not require its clients to have a minimum revenue to approve a loan. | Includes a document fee: Taycor does require a document fee, but this isn’t publicly disclosed. |
| Designed for startups: With the types of loans provided by Taycor, many startups can utilize their services. | May require a personal guarantee: Taycor may agree to provide a loan, but they may request a personal guarantee for reassurance. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| 2.2 / 5 | N/a | N/a |
Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites. N/a means that no reviews exist at the time of publication.
How to Qualify for Taycor Loan
Taylor's minimum requirements include:
- Minimum personal FICO credit score of 550
- Agreement of terms from 12 to 84 months
- Must be in business for at least 2 years
- No revenue requirement
How to Apply
Apply online, or call 800-747-9335 to speak with a representative from Funding Circle about the application process.
11. Credibly: Best for Bad Credit
As a proud partner of the National Restaurant Association, Credibly extends exclusive benefits to its members. Credibly understands the diverse financial needs of restaurants and offers a range of business loan options tailored to meet your specific requirements. Whether you need working capital, equipment financing, a business line of credit, or a merchant cash advance (MCA), Credibly has you covered.
| Term Length | 3 to 15 months |
|---|---|
| Max Amount | $400,000 |
| Est. Interest Rate | Factor rates starting at 1.11 |
| Min. Credit Score | 500 |
| Min. Time in Business | 6 months |
| Time to Funding | Same day |
Pros vs Cons
| Pros | Cons |
|---|---|
| Provides various loan types: Credibly has an array of loan options and lines of credit available for their clients. | Has a high monthly revenue requirement: Credibly requires you to have a minimum of $15,000 monthly revenue. |
| Has a low FICO credit score requirement: Credibly only requires you to have a credit score of 500 to secure a loan with them. | Weekly or daily payments required: Credibly doesn’t offer a monthly or annual payment plan. |
| Has a fast pre-qualification process: You can get pre-qualified within minutes with Credibly. | Only provides loans up to $400,000: Credibly only approves loans up to $400,000. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| 4.85 / 5 | 1.67 / 5 | 3.3 / 5 |
Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites.
How to Qualify for a Loan from Credibly
Credibly’s minimum requirements include:
- Minimum personal FICO credit score of 500
- Pass the pre-qualification process
- Must be in business for at least 6 months
- Minimum of $15,000 monthly revenue
How to Apply
Apply online or call 888-664-1444 to speak with a representative from Credibly about the application process.
12. Bluevine: Best for a Business Line of Credit
When your restaurant requires an additional cash infusion to seize growth opportunities, Bluevine's business line of credit is here to empower your ambitions. With revolving funds of up to $250,000 at your disposal, you have the flexibility to allocate the capital towards essential needs such as new equipment, payroll, repairs, and more.
| Term Length | 6 to 12 months |
|---|---|
| Max Amount | $250,000 |
| Est. Interest Rate | Starting at 6.20% simple interest for a 26-week repayment term |
| Min. Credit Score | 625 |
| Min. Time in Business | 24 months |
| Time to Funding | 1 to 3 business days |
Pros vs Cons
| Pros | Cons |
|---|---|
| Fast approval time: With Bluevine, you could be approved for your loan within 1 to 3 business days. | Requires a high credit score: Bluevine requires a FICO credit score of at least 625. |
| Quick access to funds: Bluevine will allow you access to the funds you are approved for in less than a week. | Requires a weekly repayment schedule: Bluevine requires weekly payments for their payment schedules. |
| Only requires you to pay for the funds used: Bluevine will only require you to pay for the amount of the loan you use. | Has a high monthly revenue requirement: Bluevine requires you to have a minimum monthly revenue of $40,000 to qualify for a loan. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| 4.2 / 5 | 1.21 / 5 | 3.3 / 5 |
*Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites.
How to Qualify for a Loan from Bluevine
Bluevine’s minimum requirements include the following:
- Minimum personal FICO credit score of 625
- Agree to simple weekly repayment terms
- Must be in business for at least 24 months
- Minimum of $40,000 monthly revenue
How to Apply
Apply online, or call 888-216-9619 to speak with a representative from Bluevine about the application process.
13. SBA 7(a): Best for Large Expenses
When it comes to addressing substantial financial needs for your restaurant, an SBA 7(a) loan is a powerful solution. The beauty of an SBA 7(a) loan lies in its extended repayment terms, providing you with the flexibility to utilize the funds now while alleviating the immediate pressure of repayment. This allows you to focus on growing your restaurant without compromising your cash flow.
| Term Length | Up to 300 months for most expenses |
|---|---|
| Max Amount | $5,000,000 |
| Est. Interest Rate | Variable: Prime rate plus 2.25% to 4.75%; Fixed: Prime rate plus 5% to 8% |
| Min. Credit Score | 680 |
| Min. Time in Business | Typically 3 years |
| Time to Funding | Varies by lender |
Pros vs Cons
| Pros | Cons |
|---|---|
| Has a large maximum allowance: SBA 7(a) is one of the largest loans available providing loans up to $5,000,000. | Requires collateral: SAB 7(a) loans require collateral for loans that exceed $25,000. |
| Provides long repayment terms: SBA 7(a) provides longer repayment terms than most lenders. | Takes longer to receive funding: With SBA 7(a) loans, it can take longer to gain access to the provided funding. |
| Easy to shop around for: SBA 7(a) loans are provided by many lenders and their terms vary. | Longer in-business terms: Typically, you must be open for at least 3 years before getting approved for an SBA 7(a) loan. |
Customer Reviews
| Trustpilot | Better Business Bureau (BBB) | Best Company |
|---|---|---|
| N/a | N/a | N/a |
*Disclaimer: The above customer reviews are accurate at the time of publication. For more updated review scores, please visit the corresponding websites. N/a means that no reviews exist at the time of publication
How to Qualify for an SBA Loan
SBA’s minimum requirements include:
- Minimum personal FICO credit score of 680
- Pass the pre-qualification process
- Must be in business for at least 3 years
- Agree to up to 300-month long terms
How to Apply
Apply online, or call 877-552-2692 to speak with a representative from SBA 7(a) about the application process.
Grants: Don’t Count on Them!
The reality concerning financing for small businesses is that no cost-free funding is accessible through governmental agencies or private foundations, irrespective of an individual's gender, ethnicity, or economic circumstances.
Grants are predominantly allocated to non-profit organizations or businesses involved in government-related research and development initiatives.
While there are programs like "Small Business Innovative Research" that offer grants for promising research ideas, they are usually geared towards technical projects, not common small businesses like restaurants or hair salons.
Most new businesses rely on personal savings, loans from friends or family, or small commercial loans for financing.
The notion of "free money" often arises as people seek alternatives to the traditional loan process, but it's important to understand that personal credit history plays a significant role in obtaining funding.
FREE Resources for Restaurant Owners
Frequently Asked Questions on Restaurant Funding
Do Banks Give Loans for Restaurants?
Securing a bank loan for your restaurant is the ideal scenario, as it typically offers favorable terms and rates. However, banks often perceive restaurants as risky investments, making it challenging to obtain a loan even with decent credit and revenue.
In such cases, it becomes crucial to explore alternative options, as mentioned earlier. Particularly, if you meet the criteria, it's worth considering SBA loans, which come with lower rates and better terms.
Don't lose hope, though, if your qualifications don't quite reach the highest standards. There are still viable options available, albeit requiring more extensive exploration to find the right fit for your restaurant financing needs.
Is It Hard to Get a Loan for a Restaurant?
Obtaining a restaurant loan can pose challenges, depending on your qualifications and the specific lender you approach. Banks, in particular, perceive restaurant loans as risky due to the industry's dynamic nature.
However, if you're considering alternative options such as SBA loans or products offered by online lenders, you may discover a more accessible path to qualifying for financing.
Furthermore, if you possess strong qualifications, including excellent credit, significant annual revenue, and a respectable time in business, securing a loan for your restaurant should be even less problematic.
Can I Get a Loan to Buy a Restaurant?
Securing a loan to purchase a restaurant is indeed feasible. As mentioned, several lenders specialize in providing loans tailored to business owners seeking to buy a franchise or expand by acquiring a new location.
However, it is important to recognize that acquiring a restaurant, similar to any entrepreneurial pursuit, usually requires a substantial investment. Thus, adequate preparation and the ability to prove to financial institutions that you have the required financial standing and credibility to sustain the loan are vital.
How Do You Finance a New Restaurant?
When starting a restaurant, securing financing is a critical consideration. Opening a new restaurant involves significant startup costs, requiring careful planning of the necessary resources and their associated expenses.
Obtaining financing for a new restaurant can be challenging. Banks are often reluctant to lend to restaurants due to factors such as lack of established revenue, limited time in business, and absence of business credit.
Nevertheless, there are viable options to finance a new restaurant:
- Investors
- Crowdfunding
- Business Credit Cards
- Line of Credit
- SBA Startup Loans
- Traditional Term Loans
Takeaways
- Understand the four main types of restaurant loans: Equipment Loans, Working Capital Loans, Inventory Financing, and Lines of Credit.
- Research and identify the best restaurant business loans based on your specific needs, such as working capital, short-term loans, quick approvals, established restaurants, equipment financing, bad credit options, business lines of credit, and loans for large expenses.
- Note that grants are typically not considered a dependable funding solution for restaurants. Therefore, it is crucial to investigate alternative avenues for financing your restaurant business.
- Learn about the availability of bank loans for restaurants, the challenges associated with securing restaurant loans, and the potential for obtaining a loan to acquire a restaurant.
- Prepare a comprehensive business plan and financial projections to present to potential lenders, showcasing the viability and profitability of your restaurant venture.
- Enhance your likelihood of securing favorable loan terms and interest rates by developing a robust credit history and a positive credit score. This can significantly impact your ability to obtain the financing you need for your restaurant venture.
- Explore specialized lenders who understand the unique needs of the restaurant industry and can offer tailored loan solutions.
- Consider collateral options, such as restaurant equipment or property, which can increase your chances of securing a loan and potentially lower interest rates.
- Seek advice from financial advisors or consultants with expertise in the restaurant industry to ensure you make informed decisions and select the most suitable loan options for your specific circumstances.
- Maintain a positive outlook and persistence throughout the funding process, as securing financing for a new restaurant may require time and effort, but with the right approach, you can successfully obtain the necessary funds to bring your culinary dreams to life.
Throughout this comprehensive guide on securing funding for your new restaurant, you have gained valuable insights into the world of restaurant grants and loans. Armed with this knowledge, take confident strides towards realizing your culinary dreams and creating a thriving dining establishment. Remember, with determination and strategic financial planning, your restaurant's success story awaits!