Restaurant Loans: Find the Best Option for You

Small Business, Small Business Loans
Small-Business Loans for Your Restaurant Startup and Beyond

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. 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.

But you don’t want to take on more than you can handle. Before applying for financing, consider how much you need and how you’ll use the funds.

Restaurant loans for small purchases

Running a restaurant is a big expense, but not every purchase requires excessive debt, especially if you want to replace a small piece of equipment or make minor repairs or upgrades to the dining room.

Kabbage: If your personal credit is lacking, consider Kabbage, which offers lines of credit of up to $100,000 with no minimum credit score requirements. However, higher-risk borrowers could face a higher range of annual percentage rates, with some Kabbage loans hitting triple digits. To qualify, you need at least one year in business and $50,000 or more in annual revenue.

StreetShares: StreetShares offers lines of credit and term loans up to $100,000 with APRs of 9% to 40%. However, the company limits your borrowing to 20% of annual revenue, so don’t expect large lump sums. You need one or more years of business history, a personal credit score starting at 600 and at least $25,000 in annual revenue to qualify.

  • Loan amount: $2,000 to $100,000 for lines of credit.
  • APR: 32% to 108%.
  • Loan term: 6 or 12 months.
  • Funding time: A few minutes to several days.
  • Read our Kabbage review.
Get started at Kabbage
  • Loan amount: $2,000 to $100,000 for term loans; $5,000 to $100,000 for lines of credit.
  • APR: 9% to 40%.
  • Loan term: 3 to 36 months.
  • Funding time: 1 to 5 days.
  • Read our StreetShares review.
Get started at StreetShares

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Restaurant loans for big investments

Now for the big stuff. When it’s time to expand, refurbish the entire kitchen or open a second location, look at loans that are available in large lump sums over longer repayment periods. For longer-term loans, you may want to consider an option that allows you to save on interest if you repay the loan quicker.

SmartBiz: SmartBiz provides SBA loans through its online platform, connecting you with the lowest rates — 8% to 8.7% — among online alternative lenders. Loans range from $30,000 to $350,000, making them a prime option for middle-of-the-road purchases. You need two or more years in business and a solid personal credit score, starting at 600 for loans between $30,000 and $150,000 and 650 for loans above $150,000. The lender also requires a minimum annual revenue of $50,000.

Funding Circle: Funding Circle offers large loans — up to $500,000 — with a competitive APR of 7% to 36%. To qualify, you need a personal credit score of 620 and must have two or more years in business. The company does not require an annual minimum revenue. Funding Circle doesn’t charge a fee for repaying a loan early, so it also can be an option for small purchases. The loans start at $25,000.

  • Loan amount: $30,000 to $350,000.
  • APR: 8% to 8.7%.
  • Loan term: 10 years.
  • Funding time: As quickly as 7 days but typically several weeks.
  • Read our SmartBiz review.
Get started at SmartBiz
Funding Circle
  • Loan amount: $25,000 to $500,000.
  • APR: 7% to 36%.
  • Loan term: 1 to 5 years.
  • Funding time: Average of 10 days.
  • Read our Funding Circle review.
Get started at Funding Circle


OnDeck: If your credit is lacking but you need a large sum of cash, OnDeck offers term loans of up to $500,000 with a 500+ personal credit score. However, APRs can reach up to 98%. Even though you can qualify for a large amount, OnDeck offers a repayment period of only three years. The company doesn’t charge penalties on the early repayment of the loan, but you won’t save any money because OnDeck has fixed fees. So try first to qualify for Funding Circle or SmartBiz loans.

  • Loan amount: $5,000 to $500,000.
  • APR: 9% to 98%.
  • Loan term: Repaid daily or weekly for 3 to 36 months.
  • Funding time: As fast as 24 hours but typically a few days.
  • Read our OnDeck review.
Get started at OnDeck

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Summary of options: Restaurant loans

Funding optionsGood option for:Do you qualify?Loan Amount & APR
Kabbage loans
Get started at Kabbage

Bad personal credit.
• Fast cash.

• No minimum credit score.
• 1+ year in business.
• $50,000+ annual revenue.
• Must have a business checking, payment platform or accounting software account.
• $2,000 to $100,000.
• 32% to 108%.
StreetShares loans

Get started at StreetShares
Good personal credit.
• Working capital.
• 600+ personal credit score.
• 1+ year in business.
• $25,000+ annual revenue.
• $2,000 to $100,000.
• 9% to 40%.
Get started at Smartbiz

Good personal credit.
• Low rates.
• SBA loans.
• 600+ personal credit score for loans $30,000 to $150,000.
• 650+ score for loans above $150,000.
• 2+ years in business.
• $50,000+ annual revenue
• $30,000 to $350,000.
• 8% to 8.7%.

Get started at Funding Circle
Good personal credit.
• Established businesses.
• Franchises.
• 620+ personal credit score.
• 2+ years in business.
• No minimum annual revenue required.
• $25,000 to $500,000.
• 7% to 36%.
Get started at OnDeck
Bad personal credit.
• Retail or food service businesses.
• 500+ personal credit score.
• 1+ years in business.
• $100,000+ annual revenue.
• $5,000 to $500,000.
• 9% to 98%.

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Want to compare more financing 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.

Compare business loans


Jackie Zimmermann is a staff writer at NerdWallet, a personal finance website. Email: Twitter: @jackie_zm.

To get more information about funding options and compare them for your small business, visit NerdWallet’s small-business loans page. For free, personalized answers to questions about financing your business, visit the Small Business section of NerdWallet’s Ask an Advisor page.

Updated Jan. 6, 2017.