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Restaurant Loans for Small Businesses in 2022

Online lenders provide restaurant business loans you can use toward small purchases or large investments. Compare your options.
Written by Jackie Zimmermann
Edited by Kimberly Lowe
Last updated on September 20, 2021
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Though the cadence of a busy kitchen and the sizzle of a hot grill may fuel the excitement of running a restaurant, restaurateurs are familiar with the pitfalls: broken equipment, customer gripes and employee turnover. But the financial requirements, in particular, can be overwhelming, even for the savviest business owners.
That’s why running a restaurant often requires funding, whether from investors, business credit cards or small-business loans. Compare these options for restaurant financing.

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Summary of Restaurant Loans for Small Businesses in 2022

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LenderBest ForEst. APRMin. Credit ScoreNext Steps

SBA 7(a) loan

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Best for Restaurant loans for expansions or large expenses5.50-8.00%650
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OnDeck - Online term loan

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Best for Restaurant loans for working capital9.00-99.00%600
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BlueVine - Line of credit

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Best for Restaurant loans for purchasing inventory15.00-78.00%600
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OnDeck - Line of credit

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Best for Restaurant loans for purchasing inventory11.00-61.90%600
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Our pick for

Restaurant loans for expansions or large expenses

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SBA 7(a) loan

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Est. APR

5.50-8.00%

Min. Credit Score

650

7(a) program participants include specialized lenders like Live Oak Bank and big-name traditional banks like Wells Fargo.

Pros

  • Available as a term loan or line of credit.
  • Interest rates are capped.
  • Long repayment terms available.

Cons

  • Personal guarantee is required.
  • Collateral is typically required.
  • Longer processing times than online lenders.
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Qualifications:

  • Be a for-profit U.S. business.
  • Must first use alternative financial resources, including personal assets.
  • Financial qualifications determined by individual lender.
Lowest interest rate

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Restaurant loans for working capital

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OnDeck - Online term loan

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Est. APR

9.00-99.00%

Min. Credit Score

600

OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.

Pros

  • Cash can be available within the same business day.
  • Requires low minimum credit score.
  • Less paperwork than most lenders.

Cons

  • Fixed-fee structure means early repayment will not save interest.
  • Requires frequent (daily or weekly) repayments.
  • Requires business lien and personal guarantee.
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Qualifications:

  • Minimum credit score: 600.
  • Minimum time in business: 1 year.
  • Minimum annual revenue: $100,000.
  • No bankruptcies in the past 2 years.
May fund quickly

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Restaurant loans for purchasing inventory

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BlueVine - Line of credit

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Est. APR

15.00-78.00%

Min. Credit Score

600

BlueVine's line of credit provides fast working capital for short-term borrowing needs.

Pros

  • Cash can be available within 12 to 24 hours.
  • Multiple term lengths for different financing needs.

Cons

  • May require weekly repayments.
  • Requires personal guarantee.
  • Not available in North Dakota, South Dakota or Vermont.
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Qualifications:

  • Minimum credit score: 600.
  • Minimum time in business: 6 months.
  • Minimum annual revenue: $120,000.
May fund quickly
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OnDeck - Line of credit

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Est. APR

11.00-61.90%

Min. Credit Score

600

OnDeck offers a fast line of credit for small-business owners with less-than-stellar credit who need to manage cash flow or buy inventory.

Pros

  • Cash can be available within the same business day.
  • Requires low minimum credit score.
  • Less paperwork than most lenders.

Cons

  • Fixed-fee structure means early repayment will not save interest.
  • Requires weekly repayments.
  • Requires personal guarantee.
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Qualifications:

  • Minimum credit score: 600.
  • Minimum time in business: 1 year.
  • Minimum annual revenue: $100,000.
  • No bankruptcies in the past 2 years.
May fund quickly

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Types of restaurant business loans

  • SBA loans: These government-backed loans provide the lowest rates among small-business financing and the longest repayment period. SBA loans are best for expansion or large expenses. To qualify, you need strong personal and business finances.
  • Working capital loans: These loans typically provide short-term financing to help run your day-to-day restaurant operations. Online lenders can providing working capital loans quickly and often have less stringent qualifications than banks.
  • Equipment financing: If you're looking to purchase large items like an oven or dishwasher, you can turn to restaurant equipment financing. This type of financing can be easier to qualify for than a traditional small-business loan because the equipment serves as collateral.
  • Inventory financing: You can turn to this funding option to buy food for your restaurant. Inventory financing can come in the form of a term loan or a business line of credit.
  • Business credit cards: You can use business credit cards to fund your small restaurant purchases. Though your line of credit may be lower than you’d get with a loan, it’s a solid option for recurring expenses, and you’ll be able to earn rewards, such as cash back, on your purchases. If you have strong credit, a business credit card can offer competitive APR between 12% and 22%.

Compare more small-business loan options

NerdWallet has created a round-up of small-business loans to meet your needs and goals. We gauged factors including lender trustworthiness, market scope and customer experience, and arranged the lenders by categories that include your revenue and how long you’ve been in business.
Last updated on September 20, 2021

To recap our selections...

Restaurant Loans for Small Businesses in 2022

Does your business need funding? Find your best loan options with Fundera by NerdWallet.

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