Restaurant Business Loans

How to Get Restaurant Loans in 2021


The restaurant business is not all about the fancy, spicy and tasty foods we see on display, though they form a significant part of it. You will also need to consider your choice of location, unique concept, and restaurant loans for a steady source of capital for your restaurant business to hit the success mark.

It is essential to invest in inventory, equipment, staff recruitment, and regular training. Also, consider funding your public awareness and marketing needs with the various restaurant loan options. This will help drive in new customers and continuously engage your regular clients.

With all of the restaurant needs staring you in the face, your capital is sure to run dry when starting up a new restaurant if not backed up by a restaurant financing solution. Getting a loan to augment your working capital is needed to properly manage and run your restaurant business.

restaurant loan

What You Need to Know About Restaurant Loans

Firstly, restaurant loans are specifically tailored to meet the restaurant’s needs; they have different specifications. Some are targeted toward restaurant business below two years in business, while others are for established restaurant businesses.  They can be long-term or short-term, depending on what entrepreneurs need the loan for.

There are no fixed qualification requirements because it varies from lender to lender, and the requirements also depend on the purpose for which you need the loan.

Traditionally, restaurant business loans are hard to find because many lenders consider the business less steady and risky to invest in.  Especially during and post Covid-19, since many restaurants were forced to close their doors.   This disruption in consistent revenue has halted the funding of restaurant and food service businesses, by the majority of lenders.  However, there are still some financing options with not so stringent requirements.

Why Would You Need a Restaurant Loan?

There are several reasons to need a restaurant financing but a lot of restaurateurs and entrepreneurs do so for pretty wrong reasons.

These are the top 5 reasons for restaurants seeking business loans:


Restaurant loans will come in handy for a business owner trying to set up a new location or introducing new recipes to his existing locations. Both of these scenarios will require the purchase of new equipment, rental space, and of course, a marketing campaign for effective publicity.

Renovating an existing location

Are you beginning to notice a drop in the turn out of your customers’? Do you feel your location has lost its thrill completely, and customers have gotten bored? Or you are looking for an upbeat on your business premises. You could use a restaurant loan to achieve your goals, and keep your customers returning.

Changing old equipment

Using rickety equipment can affect many things in your restaurant, from the speed of meeting customer’s needs to how early your restaurant is available to customers. An upgrade in your equipment also interprets to improved services and more satisfaction from your customers. You can do this by accessing restaurant equipment financing loans.

Improving the quality of staff

It is almost impossible to own a restaurant business without assistance. You will need a team to help you meet the different restaurant needs. They form the members of your staff. They also contribute immensely to the growth or failure of any business, depending on how they are managed.

A good team will interact daily with your customers and sometimes determine the impression your customers leave with. You must pay attention to this effect when hiring and ensure proper training from time to time to get the best results out of your Staff. You could also use restaurant business loans to fund your recruitments and training process.

Build A Business Website

A professional business website can also be a channel to bring in your customers and orders.  Your restaurant should have the menu listed on the website, a gallery of your restaurant dining room and a way to book a reservation. You may also consider using your restaurant loan to hire a photographer and take good shots of your dishes for them to be on display.

Restaurant Financing Options Available For You

Now that you know why you should seek financing for your restaurant business, what options are available to you? These are three main financing options that you could utilize as the owner of a restaurant business.

Term loan

A restaurant term loan is a loan in which repayment is made over a fixed time frame (the term). It often includes interest anywhere from 6% up to 27%.  The term loan duration varies for a period of one (1) to seven (7) years. They are often used to bridge a short-term cash gap in business. You can access from $25,000 to up to $20 million.  This Loan may or may not require collateral.  Check out a handy term loan calculator

Equipment Financing

Restaurant Equipment financing refers to loans or leases that restaurant business owners may use to purchase equipment for their businesses.  It is also known as a restaurant equipment loan or restaurant equipment lease.  The repayment period can span up from 1-8 years or up to the expected life of the equipment.

Merchant Cash Advance

A merchant cash advance (MCA) is a sale against your future receivables, also known as a credit card loan, ACH loan or working capital loan.  This type of financing product has become very popular for restaurant and food service companies alike, due to their large volume of credit card transactions.  A lender can analyze the restaurants credit card processing statements or bank statements to determine an advance amount that makes the most sense, and is affordable.  When you need fast cash, and want to provide minimal paperwork, a merchant cash advance may be your best option.  Feel free to try out our cash advance calculator to estimate your payments. 

restaurant financing - restaurant loans

How to Qualify for a Restaurant Business loan

To qualify for small business loans for restaurants, you have to have a good history. Lenders pay attention to your history in business (not many lend to startups), revenues, profitability, business credit scores, and the credit score of the board members or individuals.

So, you have to keep your credit score in the correct position. Your financial statement, income statement, and cash flow analysis should be well structured to give your lender a proper position for your business. If you are starting, ensure your business plans show the practicality of making a profit.

How to Apply for Restaurant Funding?

When you want to take a small business loan for restaurants, you have to ensure you are first capable of repaying the loan.   If you’re looking for a restaurant loan with bad credit, your business will be considered high risk.  But don’t be discouraged!  Many lenders would decline your file just based on your industry.

However, Upwise Capital is available to help established restauranteurs access low interest restaurant loans with little or no collateral needed.  For entrepreneurs that already own and run a kitchen, you can access funding to facilitate expansion or new equipment.

Quickly fill out the Funding Application Form and submit your documents to get super fast access to funding today.

So…What do you think? 

We want to hear from you.  What do you think of this article and was it helpful in your search for ways to fund your restaurant? 

Let us know by leaving a reply below.   Feel free to share this article on your social media. 


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