Best Restaurant Business Loans in December 2025
Restaurant loans can help cover costs like payroll, equipment and inventory.
Best restaurant business lenders: More details
What are restaurant business loans?
A restaurant loan refers to any business loan or line of credit used to fund a new or existing restaurant. Some lenders offer specific restaurant loans, while others provide small business financing that can cover various restaurant-related expenses.
The eligibility requirements vary based on the lender and loan type, but typically include minimum time in business, monthly or annual revenue and credit score requirements.
Startups might find it challenging to secure small business loans for restaurants, though alternative lenders and crowdfunding could help you get your restaurant up and running.
What are restaurant business loans used for?
Most restaurant loans offer flexibility in how you can spend your funds. In general, funding for a restaurant can be used for:
- Purchasing a new location
- Remodeling an existing location
- Purchasing or upgrading kitchen equipment
- Hiring and paying staff
- Covering food costs
- Creating menus
- Designing a website
- Running marketing campaigns
Types of restaurant loans
Whether you need help covering day-to-day expenses for your small restaurant or want to expand into a franchise, you’ve got multiple restaurant funding options at your fingertips. Here’s a quick overview of the common types of small business loans that could be used for restaurant expenses.
A working capital loan is a flexible form of restaurant financing that can cover expenses like daily operating costs, payroll, rent, supplies and more. However, a working capital loan isn’t ideal for long-term purchases, such as commercial real estate.
Rates and terms will vary, with some lenders requiring daily or weekly payments.
A small business term loan provides a lump sum of cash, allowing you to tackle more significant projects. Short-term loans typically need to be repaid within three to 24 months, whereas long-term business loans offer repayment terms up to 120 months.
Secured business term loans require collateral but typically have more attractive interest rates and flexible terms.
A business line of credit is ideal for covering occasional gaps in your restaurant’s cash flow. Once approved, you can draw funds up to your credit limit as often as needed, only paying interest on the withdrawn amounts.
Similar to a term loan, a line of credit may require collateral. Interest rates can vary, with some lenders charging additional maintenance and withdrawal fees.
Equipment loans provide funding for the essential equipment and machinery needed for your restaurant. Some lenders require a down payment, while others offer 100% financing with no down payment required. Since the equipment acts as collateral, equipment financing tends to have less strict eligibility requirements, although lenders can seize your purchased equipment if you default on your loan.
Recently established businesses can consider applying with alternative lenders that offer restaurant equipment financing for startups.
If you need to purchase real estate for your restaurant or franchise, a commercial loan could help. To qualify, your restaurant typically must occupy at least 51% of the property you wish to finance.
You’ll also likely need to provide at least a 20% down payment, with the restaurant acting as collateral if you default on the loan.
The U.S. Small Business Administration (SBA) offers a partial guarantee and sets interest rate limits for SBA loans, making them an affordable option for restaurant financing. You’ll generally need a credit score of 650 or higher, though some lenders may have higher or lower requirements.
Your SBA options include:
7(a) loans: Up to $5,000,000 for general business purposes, with terms up to 300 months.
CDC/504 loans: Up to
Microloans: Up to
You can apply through an SBA-approved lender.
A merchant cash advance provides a lump sum of funds in exchange for a portion of your restaurant’s future income, including a set percentage of debit and credit card transactions.
MCAs can have lenient credit requirements, making them an ideal choice for those who expect a boom in sales in the coming months.
Invoice factoring is another way to access funding to catch up on unpaid bills. Basically, you sell your restaurant’s outstanding invoices to a factoring company to receive advance funding. The factoring company then collects customer payments on your behalf, subtracting a service fee before sending the remaining balance to you.
Since the funds are collected from the customers, their credit scores matter more than yours. But your business must have a steady flow of invoices for this to be a viable financing method.
How to get a business loan for a restaurant
Here are the general steps you need to take to get a restaurant business loan.
1. Determine your funding needs
Creating a business budget can help you calculate how much you need to cover essential expenses for your restaurant. Make sure you can afford the scheduled repayments to avoid getting too far in debt. You’ll also want to research the different loan types to find the best fit for your business needs.
The total cost of opening a restaurant depends on multiple factors, such as location, rent, equipment and food availability. According to Toast, average restaurant startup costs range from $95,000 to $2 million and beyond.
You can calculate your own estimates by looking at typical startup costs, such as:
- Registering your business
- Purchasing or renting property
- Restaurant licenses and permits
- Payroll services
- Equipment purchases and leasing
- Business insurance premiums
- Technology and IT
Read our full guide on how to start a business to learn more.
2. Evaluate your qualifications
You can usually find a lender’s list of restaurant loan requirements online, such as minimum credit score, annual revenue and whether additional collateral is required. While alternative lenders usually have more lenient qualification requirements, they typically charge higher fees with less flexible repayment terms.
You can check your credit score in advance with LendingTree Spring to understand your eligibility options. Boosting your credit score could help you qualify for more competitive restaurant loans in the future.
3. Research and compare restaurant lenders
Once you’ve figured out your funding needs and your business qualifications, you can search for potential lenders that match your criteria. Pay attention to hidden fees like prepayment penalties and annual maintenance fees, which can make the loan’s overall cost higher than expected. Also, check that the lender reports payments to all three of the major credit bureaus to help you build your business credit.
You can also read small business lender reviews in advance to stay aware of any predatory lenders.
4. Gather required business documents
Once you find your ideal lender, it’s time to get the necessary paperwork in order. While the exact requirements vary by lender, here are some standard documents you may need to provide:
- Restaurant business plan
- Personal financial statement
- Profit and loss statements
- Balance sheets
- Projected financial statements
- Business certificates and licenses
- Business tax returns
- Loan application history
- Business history
- Collateral information
- Business lease, if applicable
5. Apply and review offers
Most restaurant loan applications can be completed online, although certain traditional lenders might require an in-person visit.
Funding times will vary based on the type of lender and loan. For SBA, traditional bank and credit union loans, approval and funding times can take up to two months or longer. If using an online lender, funds could be disbursed within one to three business days after approval.
How to compare restaurant loans
Comparing the following loan details can help you choose the best restaurant loan for your needs:
Interest rate
Check if the business loan interest rate is variable or fixed. If the lender charges a factor rate, try to convert it before accepting the offer to properly compare against other offers. The lower the interest rate, the more you can save in the long run. However, you can always refinance your business loan if you find a better rate later.
Repayment term
Some lenders require daily or weekly payments, while others charge you monthly. While a longer repayment term can give your budget extra breathing room, you’ll likely pay more interest over the life of the loan.
Use our business loan calculator to estimate how much you could borrow to drive business growth.
Time to fund
If you need funds fast, a quick business loan can provide funding in as little as 24 hours. The fastest business loans, however, tend to come with higher rates and fees.
Additional fees
Review your business loan agreement to ensure you understand all the fees, such as origination fees, late charges and business loan prepayment penalties.
Loan purpose
Not all business loans can be used to cover restaurant expenses like property and equipment. Talk to the lender before signing on the dotted line to ensure the loan funds can be used to cover your business’s operational expenses.
Alternatives to restaurant loans
In addition to small business restaurant loans, here are some other funding options to consider:
Small business grants
Small business grants are offered by federal, state or local government organizations, as well as private companies and nonprofit foundations. The funds can be used to help start, grow or expand your business or to help boost the economy in high-need areas. While business grants can be competitive, it’s worth the time and effort of applying to access free money for your restaurant.
Business credit card
Business credit cards are another type of financing that can help cover low-cost and everyday expenses. You may be able to earn rewards for your purchases and even write off the interest as a qualified business tax deduction.
However, some business credit cards come with an annual fee, and almost all charge higher interest rates than regular business loans. Because of this, it’s best to use them on an as-needed basis, making sure to pay off the balance in full each month.
Crowdfunding
You can create a campaign on a crowdfunding platform such as GoFundMe or Kickstarter, allowing friends, family and your fan base to contribute to your restaurant goals. In return, you can offer discounts, access to VIP events, complimentary meals and more.
Although it does rely on the generosity of others, crowdfunding typically provides free money you don’t need to pay back. This tends to work best if you have a strong community or online presence.
Frequently asked questions
It depends on your credit score, cash flow and the age of your business. Restaurants may have a harder time getting funding, as they’re often viewed by lenders as unpredictable and risky. However, many lenders cater to restaurateurs.
Even if you lack a robust personal or business credit score or are just launching your restaurant, there are options. For example, you can try a business loan aimed at startups or start a crowdfunding campaign to jump-start your restaurant.
If you can meet the SBA loan requirements, you can use the funds to cover restaurant-related expenses like purchasing real estate, furniture or equipment, hiring staff, printing menus and more.
Additionally, there are SBA loans for franchises if you want to open a branch of an established restaurant chain. Note that SBA loans aren’t often accessible for startups because some lenders may require at least two to three years of business history to qualify.
Some restaurant business loans require collateral such as equipment, vehicles, inventory, real estate or accounts receivable to reduce lender risk. In addition, they may require a personal guarantee.
If you can’t provide collateral, you could consider an unsecured business loan or a startup loan with no money, but be prepared that these loan types typically come with higher fees and less-flexible repayment terms.
Some lenders offer restaurant loans to borrowers with credit scores as low as 500. However, having a good credit score of 670 or higher can help you qualify for the most competitive offers.
Our methodology: How we chose the best restaurant loans
We reviewed the leading restaurant lenders to determine the overall best eight restaurant loans. To make our list, lenders must provide funding options suitable for restaurant expenses while meeting the following criteria:
- Eligibility criteria: To include options for all stages of restaurant ownership, we included lenders with a wide range of credit score, time in business and annual revenue requirements.
- Rates and terms: We prioritized lenders with competitive rates, reasonable fees and flexible repayment terms.
- Repayment experience: We considered each lender’s reputation and overall business practices, favoring lenders that report to all major credit bureaus, offer reliable customer service and provide customer perks, like free business coaching or business rewards.