Restaurant Loans

A restaurant is an exciting business, with lots of daily customers, lots of potential to grow, and a business that the owners genuinely love and take pride in.

There are many reasons a restaurant business loan may be a necessary component to keeping things running smoothly.

• Opening a 2nd location
• New equipment such as ovens
• Expanding square footage to include more tables
• Marketing & Advertising
• Emergency situations such as natural disasters
• Adding new services, such as catering or event services

As the saying goes, it takes money to make money. When a restaurant is looking to expand, looking into business loans and financing is a great place to start.

A bank is the best place to look if eligible, as rates will be the lowest. However, most businesses desire quicker access to funding, and with less documentation and hassles, there are a few solid options to grow your restaurant.

Short Term Business Loan

This is the quickest, and easiest way for a restaurant to obtain working capital, in a quick time frame. Out of all restaurant business loans, this would be the easiest to obtain. With repayment terms from 6-18 months, you will not be entangled in long term debt. Repayment terms are generally much easier to handle, typically with smaller weekly payments to ease the larger monthly payment commitment. For more details on short term funding, check out the benefits here.

Merchant Cash Advance

Any restaurant takes the majority of their business in credit and debit card swipes. A merchant cash advance is similar to short term business loans, however has added flexibility. This type of financing can advance you a lump sum of funding in exchange for a daily small percentage hold back of your sales. This allows flexibility, you have a slow day, so does the funder. Have a great day? Funder does too! These typically mature in 9-12 months, sometimes sooner, and avoids the stress of fluctuating business activity.

Term Loan

For those bigger moves, such as opening a 2nd location, sometimes a quick repayment structure is not the answer. For restaurants with 2 years in business, positive financials, and at least a 680 FICO score, a term loan may be the best loan option for your restaurant. Terms typically span 2-5 years, with a monthly payment and lower rates, typically 9-15% APR, with no prepayment penalty. You can learn more about term loans here.

Restaurant Line of Credit

A revolving line of credit is a great asset to any restaurant that has funding needs crop up from time to time. Without the requirement of taking a lump sum of funding, a restaurant line of credit can give you access to revolving credit, without having to charge up personal credit cards, and in turn lowering your FICO. The main advantage with this type of funding is the cost, it is cheaper than other programs, and you only pay interest on the time you have the funding. You can learn more specifically about lines of credit here.

As you can see, there are plenty of options for restaurant business loans outside of a bank, or asking friends and family. Always ensure you are working with a company that helps guide you to the best options, and does not try and talk you into a specific one.