Compare Restaurant Loan Options
Comparing loan types can help you narrow down options and ensure you get the best deal. Here’s a snapshot comparison of the best restaurant business loans:
| Loan Type | Min. Credit Score | Max. Loan Amount | Term Length | Key Benefits |
|---|---|---|---|---|
| Business Line of Credit | 550 | Varies | -- | Revolving credit, only pay interest on withdrawals |
| Short-Term Loan | 550 | $ 5 million | 6-24 months | Lump sum with no collateral required |
| Equipment Loan | 550 | Value of equipment | Varies | High approval rate; equipment is the collateral |
| SBA Loan | 640 | $5 million | 5-25 years | Guaranteed by the SBA up to 85% |
| Working Capital Loan | 500 | $5 million | 6-24 months | Available via any loan type, use for any reason |
| Merchant Cash Advance | 500 | Varies | -- | Upfront advance, repay as you earn |
Potential usues for food service business loans
In the food industry, having funds for upgrades can set you apart. Whether it's new seating, better equipment, or growth marketing, the right investments matter. Below is a list of how a food service business loan can make a difference for you.
- Food and liquor purchases
- Renovations and remodels
- New location openings
- POS system upgrades
- New kitchen equipment
- Kitchen equipment maintenance
- Payroll and taxes
- Operating expenses
- PPE and sanitation supplies
- Pandemic relief
- Hiring and training of new employees
- Advertising and marketing.
- Managing unanticipated business expenses.
- Debt refinancing
How to Apply for Restaurant Financing
Once you’ve compared lenders and options, the following steps will help you acquire a business loan.
1. Determine Which Loan You Need
You’ll want to determine which type of business loan or financing is a good match for your business goals. Prioritize loans with rates, fees, collateral requirements, and repayment terms that you can meet.
2. Check Your Eligibility
After you know the type of loan you want, make sure you meet their qualifications. Determine your eligibility as a restaurant business following the factors that most influence your loan approval. These include:
- Your restaurant’s time in business
- Annual revenue
- Credit score
A good rule of thumb is to review your personal and business credit score before applying for a loan. This way, you’ll know what lenders see and can ensure they report accurate information.
3. Gather Necessary Documents and Submit Application
Most lenders require the following documents with your loan application:
- Business information (lease, certificate, licenses)
- Financial statements (balance sheets, profit and loss statements)
- Personal and business tax returns
- Restaurant business plan
- Collateral information
Once you have your documents in order, you’re ready to fill out and submit your loan application. It may take weeks or months to hear back from traditional lenders. Fortunately, online lenders like Clarify Capital typically approve applications within 12 days and can offer same-day business loans.
Apply Online
Quick Funding to Grow Your Restaurant
When working with Clarify Capital for a restaurant business loan, our quick online approval and turnaround time gets you funds in 48 hours or less. Our loan advisers work with a network of 75+ lenders to secure you the lowest APR and repayment terms tailored to your business.
Best of all, you don’t need collateral to get funded. You can retain complete ownership of your restaurant with our unsecured business loans.
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Won't impact your credit
FAQs About Restaurant and Bar Loans
Quick funding is the secret sauce for survival and growth in the food business. Here are frequently asked questions from restaurateurs and food entrepreneurs we've financed.
How do I get a business loan for a new restaurant?
To secure a restaurant business loan, you'll want to determine which type of financing is a good match for your business goals. After you have an idea of the type of loan you want, you're ready to take the next steps and determine your eligibility as a new business. Fill out a loan application online and talk to an adviser to get the process started. We've worked with new restaurants and startups to get small business owners the restaurant financing options they need at favorable monthly payments.
How has the COVID-19 pandemic affected restaurant and bar loans?
The pandemic made some lenders more cautious about granting loans to restaurants and bars, and many traditional banks may still have stricter approval requirements. Other providers, like online lenders, tend to be less restrictive with restaurant and bar loan eligibility. Our lenders at Clarify can assist you in finding the right loan for your situation.
Is it hard to get a restaurant loan?
No. Many business owners find the funding process for loan products to be fairly straightforward. While traditional bank loans may require financial statements, a business plan, and a drawn-out application process, Clarify streamlines the process for borrowers.
Do I need collateral for a restaurant loan?
Some loan types require a personal guarantee, but not all. For example, SBA loans typically require collateral. Fortunately, alternative financing options, like unsecured business loans, do not require any security.
Sources
- USDA ERS - Market Segments. (n.d.).
