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Best Restaurant Loans for Small Businesses 2020

Jackie ZimmermannApril 7, 2020

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Online lenders provide restaurant business loans you can use toward small purchases or large investments. Compare your options.

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 online options for restaurant financing.

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Our pick for

Restaurant loans for small purchases

Kabbage - Line of credit

Kabbage - Line of credit

Est. APR

24.00 - 99.00%

Min. Credit Score

560

Pros

  • Financing up to $250,000 available within a few days.
  • Accepts low credit scores.

Cons

  • Rates are high compared to other online lenders.
  • Must have online checking or PayPal account to verify cash flow.
  • Fixed-fee structure means early repayment does not save interest.

Qualifications

  • Minimum credit score: 560.
  • Minimum time in business: 1 year.
  • Minimum annual revenue: $50,000.
Read full review
Kabbage provides fast loans for business owners with bad personal credit, but rates can be high.

Our picks for

Restaurant loans for big investments

SmartBiz - SBA loan

SmartBiz - SBA loan

Est. APR

6.73 - 10.29%

Min. Credit Score

650

Pros

  • Competitive rates among online lenders.
  • Faster than getting an SBA loan from a bank.

Cons

  • Must have strong financials, supported by personal and business tax returns for the past 3 years.
  • Stringent rules on use of proceeds.
  • Requires business lien and personal guarantee.

Qualifications

  • Minimum credit score: 650.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $50,000.
  • No bankruptcies or foreclosures in the past 3 years.
Read full review
SmartBiz’s low-cost SBA loans work best for established businesses that want to finance an expansion or refinance debt.
OnDeck - Online term loan

OnDeck - Online term loan

Est. APR

9.00 - 99.00%

Min. Credit Score

600

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.

Qualifications

  • Minimum credit score: 600.
  • Minimum time in business: 3 years.
  • Minimum annual revenue: $250,000.
  • No bankruptcies in the past 2 years.
Read full review
OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.

Easily get real, personalized small business loan rates to compare — not just ranges or estimates.

It’s free and won’t affect your credit.

Get Started

on Fundera's website

Summary of Best Restaurant Loans for Small Businesses 2020

LenderBest ForEst. APRMin. Credit Score
Kabbage - Line of credit

Kabbage - Line of credit

Best for Restaurant loans for small purchases

24.00 - 99.00%

560

SmartBiz - SBA loan

SmartBiz - SBA loan

Best for Restaurant loans for big investments

6.73 - 10.29%

650

OnDeck - Online term loan

OnDeck - Online term loan

Best for Restaurant loans for big investments

9.00 - 99.00%

600

Restaurant loans for small purchases

Running a restaurant is expensive, but not everything you need to spend money on requires excessive debt or long-term financing, especially things like replacing a small piece of equipment or making minor repairs or upgrades to the dining room. Here are some short-term loan options for these types of smaller purchases.

If you need short-term financing fast: Kabbage offers lines of credit of up to $250,000 for restaurant working capital needs.

If you want competitive rates: StreetShares offers a standard line of credit and term loans of up to $150,000 with annual percentage rates starting at 9%. However, the company limits your borrowing to 20% of your annual revenue, making it a good fit for smaller, less expensive purchases.

Restaurant loans for big investments

When it’s time to expand, refurbish the entire kitchen or open a second location, look at loans that can provide a large lump sum with a longer repayment period.

If you want the lowest rates and longest repayment term: SmartBiz provides Small Business Administration loans through its online platform, connecting you with the lowest rates among online alternative lenders.

If you want low rates and a faster approval: Though APRs are higher than SmartBiz loans, Credibility Capital still offers competitive rates among online alternative lenders. SmartBiz can also take weeks, whereas funding from Credibility Capital is seven days on average.

If you’re looking for quick approval: OnDeck uses an online application process that can take as little as 10 minutes for term loans up to $500,000.

Alternative financing options

Outside of loans, you can also consider a business credit card 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 comparison tool 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 April 7, 2020

To recap our selections...

NerdWallet's Best Restaurant Loans for Small Businesses 2020