Restaurant loans, compared side by side

Restaurant loans come in seven main forms — SBA loans, term loans, lines of credit, working capital loans, equipment financing, equipment leasing, and short-term cash advances — with funding amounts from $5,000 to $5 million and speed from same-day to six weeks. Most restaurants qualify for at least one type with 6+ months in business, consistent monthly revenue, and credit in the 600s. The full comparison, including typical range and speed for each option, is in the table below.

Restaurants get treated differently than most small businesses when they walk into a bank. Thin margins, high failure rates in the first few years, and revenue that swings with the season make traditional underwriting nervous — even when the business itself is healthy. That gap created a specialized lending market that prices risk very differently from lender to lender, which makes matching the right restaurant loan type to the actual need the single biggest factor in both approval odds and total cost.

Restaurant Financing Options Compared

Each row solves a different problem. Financing a full buildout with a short-term advance is expensive relative to slower options; covering a two-week payroll gap with an SBA loan is far too slow. See the full breakdown of routes in restaurant financing options.

SBA Loans: The Lowest Rates, the Longest Process

The SBA 7(a) program is usually the least expensive way to borrow for a restaurant. A bank funds the loan; the U.S. Small Business Administration guarantees a portion of it, which lets lenders approve restaurants they might otherwise decline. Terms run up to 10 years for working capital and equipment, and up to 25 years when real estate is involved. Down payments typically land in the 10–15% range, higher for startups.

The trade-off is time and paperwork — tax returns, financial projections, and 2–6 weeks of underwriting are normal. If your timeline allows it, an SBA loan is worth exploring first — the full breakdown of the 7(a) and 504 programs, eligibility, and timeline lives on our dedicated SBA loans for restaurants hub. For the general application process here, see how to get a restaurant loan; for the requirements checklist across lender types, see restaurant loan requirements.

Term Loans, Working Capital, and Lines of Credit

A conventional term loan suits an established restaurant with 1–2+ years of revenue history: a lump sum, a fixed schedule, done. A restaurant line of credit works differently — you draw only what you need, pay interest only on the drawn balance, and reuse the line as you repay it. For an industry where a slow month is normal rather than an anomaly, a line of credit is often the more useful standing tool.

For strictly short-term needs — payroll, inventory ahead of a busy stretch, an equipment repair that can't wait — see restaurant working capital loans. And if your revenue genuinely swings by season rather than staying flat, seasonal restaurant financing covers the specific strategies for smoothing that gap.

If you're comparing a small business loan for a restaurant against SBA-specific programs, small business loan for restaurant breaks down where general small-business lenders fit versus restaurant-focused ones.

Financing the Kitchen Itself

When most of what you need money for is physical equipment — ranges, refrigeration, a POS system — a dedicated equipment loan or lease is usually cheaper and faster than general-purpose borrowing, because the equipment itself secures the debt. Loan versus lease is its own decision: see equipment financing vs. leasing for restaurants. For a full commercial kitchen package rather than a single piece, see commercial kitchen equipment loans, and for the buy-and-return-it-later structure, lease-to-own restaurant equipment. Curious what actually counts as usable collateral? Kitchen equipment as collateral explains what lenders will and won't accept.

How Much Can a Restaurant Borrow?

Lenders generally size a restaurant loan against three things: monthly revenue, time in business, and debt service coverage — whether the business's cash flow can comfortably cover the new payment on top of existing obligations. As rough guardrails, working-capital lenders often cap loan size around 1–1.5× average monthly revenue, while SBA loans can go much higher because they demand deeper documentation. According to the Federal Reserve's 2026 Small Business Credit Survey, 42% of small business applicants received the full amount they requested, 36% got partial approval, and 22% were denied outright — a useful reality check before you set your ask. See the full pattern behind those numbers in why restaurant loans get denied.

Run your own numbers with the restaurant loan calculator before you approach a lender — sizing the request correctly is one of the easiest ways to avoid a partial approval.

What Restaurant Loan Rates Actually Look Like

Rates vary widely by loan type, credit profile, and how the lender prices restaurant risk specifically — there's no single "restaurant loan rate." SBA loans tend to sit lowest; short-term products cost the most for the convenience of speed. See the full range-by-type breakdown, including what moves your rate up or down, in restaurant loan rates.

Bad Credit? Options Narrow but Don't Disappear

A restaurant loan with bad credit is harder to get from a bank, but not impossible — equipment financing and revenue-based products weight your recent sales more heavily than your score. See realistic paths, honest trade-offs, and what to expect at different credit tiers in restaurant loan with bad credit.

Restaurant Loan Requirements: What Lenders Look For

Approval generally comes down to four things: time in business (6–12 months for most online lenders, 2+ years for banks), monthly revenue (often $10K+ minimum), credit score (600–650+ opens most doors), and clean, complete documentation. The full checklist by loan type is in restaurant loan requirements.

Running a Bar Instead of a Full-Service Restaurant?

Bars and taverns qualify for most of the same loan types, but a few programs and lenders treat them as their own category — see the SBA loans for restaurants hub for the bar-specific guides.

FAQ

What credit score do I need for a restaurant loan?

600–650+ opens most online lending products; banks and SBA lenders generally prefer 680+. Below 600, options narrow to equipment financing and short-term advances, both of which weight revenue and collateral more than credit history.

How fast can a restaurant get funded?

Equipment financing and working capital loans: often 24–72 hours. Term loans: days to two weeks. SBA loans: typically 2–6 weeks from a complete application. The gap comes down to underwriting depth, not lender goodwill.

Can a new restaurant with no history get a loan?

Yes — startups typically qualify through SBA loans (with a strong business plan and a larger down payment, often 20–30%), equipment financing (where the equipment itself is the collateral), or personal-asset-backed options rather than a standard bank term loan.

Are restaurant loans harder to get than other small business loans?

Generally yes, from traditional banks. The U.S. Bureau of Labor Statistics shows food-service establishments close at a higher rate in their early years than many other small-business categories, which is exactly why specialized restaurant lenders — underwriting on revenue patterns instead of industry stereotype — exist in the first place.

How much of my loan request will actually get approved?

It depends on your file, but the Fed's 2026 Small Business Credit Survey found 42% of applicants got the full amount requested and another 36% got a partial approval — meaning most applicants get funded at some level, just not always at 100% of the ask.

This guide is for general information only and is not financial advice. Loan terms, rates, and qualification criteria vary by lender and change over time. Confirm current terms directly with any lender before applying.