Best Small Business Loans For Restaurants 

Running a restaurant can be both a work of passion and a high-intensity ownership experience. Whether you’re looking for funding to pay for kitchen renovations, or need quick cash to pay for repairs on a broken industrial refrigerator, you’re likely going to require some form of lending at various points during your restaurant’s operation.

How do you get a small business loan for a restaurant?

Time in business: While having two years in business will help you secure a much lower rate on a loan for your restaurant, many lenders require just one year.

Credit score: Having a credit score above 650 will give you access to the most affordable rates. However, some companies offer loans to restaurants whose owners have credit scores as low as 550, while others take a holistic approach to application evaluations and don’t stipulate any minimum requirement.

Available collateral/down payments: Not all lenders require collateral or down payments on loans. However, if you’re a new restaurant or do not have strong financial qualifications, it can be a good idea to be ready to put up collateral to secure a lower rate or higher amount.

Equipment vs Real Estate Purchases

If you’re looking to purchase new equipment or expand your properties, you can look into loans that are offered specifically for these purposes. The Small Business Administration (SBA) offers commercial real estate loans at extremely low rates to borrowers who fulfill SBA’s set of requirements. However, there are also many lenders who will work with owners who do not fulfill this list of qualifications or who are very new to the industry.

How much does it cost (on average) to start a small restaurant?

The cost of starting a restaurant can range from a few thousand dollars into the hundreds of thousands. According to, the average cost of starting one is $275,000, or $3,046 per seat. When evaluating how much it will cost you to open your small restaurant, make sure to factor in the cost of the property, utilities, kitchen supplies and machinery, food and labor.

What documentation is needed to apply for a restaurant loan?

If you’re applying for a standard loan for your restaurant, there will be a few documents that you’ll need to have available before starting the process:

  • Your personal financial information
  • Personal credit report
  • Business’ credit report
  • Business plan
  • Income tax returns
  • Personal bank statements
  • Business bank statements
  • Documentation of collateral (if required by the lender)
  • Personal contact information

Requirements & how to qualify for a restaurant loan

Because there is such a wide variety of options for restaurant owners to use to fund their businesses, most borrowers will be able to find some form of financing. However, having a credit score above 650 and more than two years in business will drastically improve any potential borrower’s chances of finding a low-cost loan.

Best Small Business Loan Options For Restaurant Owners

For New Restaurants & Smaller Purchases


Kiva is a nonprofit crowdfunding platform that connects borrowers to independent lenders and investors all over the world. This can be a very flexible form of funding, because it allows borrowers to speak directly with interested lenders and establish terms on a case-by-case basis. Crowdfunding can be an ideal option for new restaurant owners who have trouble qualifying for traditional or low interest, online loans.


StreetShares offers loans and lines of credit of up to $250,000 and invoice financing for up to $2 million. Their rates range between 9% and 40%, depending on borrowers’ financial qualifications. Restaurants that don’t have the credit or time in business to take out a loan or line of credit with this lender but who have unpaid invoices can sell those invoices for an advance of a portion of the unpaid amount.

Loan Amounts $2,000 to $250,000
APR Range 24.00% to 99.00%%
Repayment Terms Up to 3 years
Time to Funding Typically 1 – 5 days
Click “Check Rates” to apply to StreetShares

» MORE: StreetShares Business Loan Review


Fundation’s business loans start at $20,000, with a maximum amount of $500,000 and rates ranging between 8% and 30%. With APRs in the single digits, Fundation offers lower rates than most of its competitors, and flexible borrowing amounts.

For Established Restaurants Looking To Expand

Credibility Capital

Credibility Capital’s business loans start at $50,000 with a maximum amount of $400,000. This lender has a maximum APR of 25%, and a minimum of 10%. Credibility Capital is best for restaurant owners who have above-average credit scores, multiple years in business and high annual revenue.

Loan Amount: $10,000 – $350,000
APR Range: 8.00% – 25.00%%
Time to Fund: Typically 7 days
Loan Term: Up to 3 years
How To Qualify: 680+ Personal Credit Score
$250,000+ Annual Revenue
Great Option For: Borrowers With Good Credit
Short & Medium-Term Financing
Click “Check Rates” to apply to Credibility Capital

» MORE: Credibility Capital Business Loan Review


SmartBiz offers loans starting at $30,000, with a maximum of $350,000. This lender has some of the lowest APRs in the online business lending industry, with rates starting at 9.7%, and a maximum of 11.04%.

Loan Amount: $30,000 – $350,000
APR Range: 9.7% – 11.04%
Time To Fund: As soon as 7 days
Loan Term: 10 Years
How To Qualify: 675+ Personal Credit Score
$100,000+ Annual Revenue
Click “Check Rates” to apply to SmartBiz

» MORE: SmartBiz SBA Loan Review


OnDeck offers business loans and lines of credit ranging between $5,000 and $500,000. Their rates start at 9.1%, with a maximum of 99.8% for term loans. Rates for their lines of credit range between 11% and 63.2%.  Although APRs with this lender can be quite high, they can also be competitively low for established and well qualified businesses.

Loan Amounts $5,000 to $500,000
APR Range As low as 9.99%
Repayment Terms Term loans up to 3 years
Time to Funding As fast as 1 day
Click “Check Rates” to apply to OnDeck

» MORE: OnDeck Business Loan Review


Lendio is a funding marketplace offering several different forms of restaurant and business financing. With loans ranging between $1,000 and $5 million, repayment terms of up to 25 years and potential annual percentage rates in the single digits, this marketplace can be a great place for well qualified and established restaurant owners to start their funding search.

Restaurant Loan Alternatives

Kabbage vs LendingClub

Kabbage’s business lines of credit range between $2,000 and $250,000, with rates starting at 24% and capping out at 99%. LendingClub is a much lower cost business credit provider, with amounts ranging between $5,000 and $300,000, and a maximum rate of 35.11%.

Although LendingClub’s borrowers are likely to be approved for a lower rate than with Kabbage, the lender also has much more stringent requirements, with a minimum credit score of 620 to qualify.

Pros & Cons of Loans vs Credit Card



  • Fixed amount disbursed
  • Access to lump sum
  • Fixed monthly or weekly payments
  • Good for funding one-time expenses


  • Borrowers may take out more funds than they need and have to pay interest on financing that they did not need
  • Potentially high APRs
  • More difficult to get approved for a very high amount than with a business line of credit

» MORE: Compare Business Loans

Business Credit Card


  • Only pay interest on what was used
  • Have access to an amount of money, but there is no requirement to use all of it
  • Good for funding cyclical expenses


  • May require more frequent repayments than a loan
  • May have less flexible repayment terms than a long-term business loan
  • No fixed payments
  • Minimum spending requirements


Operating a restaurant can be an expensive business, and you likely won’t be able to fund everything out of pocket. Before applying for loans, remember to evaluate your exact financial needs to figure out which form of funding is right for you. While emergency repairs might require a large loan from an online lender, cyclical expenses might warrant applying for a business line of credit. Even if you’re a first-time owner or you have a low credit score, be sure to compare multiple offers before committing to a product.

Compare Business Loans

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