Restaurant Capital by Use Case: Equipment, Renovation, Expansion, Working Capital

Pick the use case below that matches what you need the money for — equipment, renovation, expansion, or working capital — and go straight to that guide. Each one covers qualification requirements, realistic rates, and the traps specific to that funding type. If you're still sorting out which product fits, the orientation below will help.

Key differences: matching capital to your actual need

Restaurant owners get into trouble when they fund a long-term need with short-term money, or use slow SBA timelines to solve a cash crisis. The four use cases on this page draw on different loan structures, different lender pools, and different approval criteria — and knowing which bucket you're in before you apply saves you weeks and thousands in unnecessary interest.

Equipment financing is the most straightforward category. Lenders treat the equipment itself as collateral, which keeps rates lower — typically 8–18% APR — and compresses approval to 1–3 days at most specialty lenders. Down payments run 10–20% on conventional deals. If the asset you're financing qualifies under Section 179, the 2026 deduction limit of $1,220,000 means a well-timed purchase can offset a substantial portion of the cost at tax time. For a full breakdown of what qualifies — ovens, refrigeration units, POS systems, hood venting — start at the equipment financing guide. One thing that trips operators up: financing equipment with a working capital loan because it funded faster. Short-term working capital rates run 15–45% APR, versus 8–18% for purpose-built equipment products.

Renovation financing involves more lender judgment because there's no discrete hard asset to repossess. Buildout, code-compliance work, and décor upgrades are typically funded through SBA 7(a) loans (up to $5,000,000, rates 8.5–11% APR in 2026, real estate and major structural work amortized up to 25 years), conventional term loans, or — for franchise operators doing a brand-mandated remodel — specialized franchise renovation lending that can move faster than a standard SBA timeline because the brand relationship de-risks the deal for certain lenders. The common mistake here is underestimating total project cost and having to layer a second, more expensive loan mid-renovation.

Expansion capital — a second location, a food truck, a ghost kitchen — involves the highest loan amounts and the most lender scrutiny. Lenders want to see that your existing unit covers its own debt service (minimum 1.25x DSCR) before they'll underwrite a new one, and SBA 7(a) approval runs 30–45 days even on clean files. The expansion capital guide walks through site-cost modeling and how to structure the application so existing-unit financials support rather than complicate the new-unit case.

Working capital is the catch-all for operating needs: inventory before a busy season, payroll during a slow one, a gap between a large catering receivable and your next supplier invoice. Lines of credit (8–20% APR) are the cleanest tool here; merchant cash advances (factor rates 1.15–1.45x) are the fastest but most expensive. Alternative lenders typically require $10,000–$15,000 per month in revenue and will review 12 months of bank statements. The working capital guide explains when a line of credit beats an MCA and how to structure draws so you're not paying interest on idle cash. For a broader look at how restaurants are solving equipment and operational funding gaps in parallel, the path-selection framework there is worth a read before you commit to a single product.

Use case	Best product	Typical rate	Speed
Equipment	Equipment loan / lease	8–18% APR	1–3 days
Renovation	SBA 7(a) / term loan	8.5–11% APR	30–45 days
Expansion	SBA 7(a) / conventional	8.5–11% APR	30–45 days
Working capital	Line of credit / MCA	8–20% (LOC); 1.15–1.45x (MCA)	1–7 days

The single biggest mistake across all four categories: applying to the wrong product first, getting a denial, and then facing a hard inquiry that can drop your score 5–10 points before you reach the right lender. Read the guide that matches your situation, confirm you meet the baseline requirements, then apply.