Food & Beverage
Business Funding for Restaurants
Restaurants operate on razor-thin margins, typically 3 to 9 percent net profit, and the costs never stop. Between food costs, labor, rent, and equipment, most restaurant owners are cash-strapped even when the dining room is full. Opening a second location or renovating an existing one requires substantial capital that the business itself rarely generates fast enough.
Common Uses
What Restaurants Use Funding For
- Renovate the dining room, kitchen, or patio to increase seating capacity
- Purchase commercial kitchen equipment like walk-in coolers, ovens, and fryers
- Cover payroll during seasonal slow periods or after a soft opening
- Fund a second location buildout including lease deposit and tenant improvements
Funding Options
Best Funding Types for Restaurants
Merchant Cash Advance
Get a lump sum repaid through a small percentage of daily credit card sales. Restaurants process high card volume, which makes MCAs easy to qualify for, and repayments scale down automatically on slow days.
Equipment Financing
Finance commercial ovens, refrigeration, POS systems, and exhaust hoods with the equipment as collateral. Restaurant equipment lenders fund both new purchases and used equipment from restaurant supply dealers.
SBA 7(a) Loan
The best option for opening a new location or doing a major renovation. SBA loans offer 10-year terms and rates significantly lower than merchant cash advances, though you need strong financials and a solid business plan.
What Lenders Look For
Qualification Notes for Restaurants
Related Industries
Related Food & Beverage Funding
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