Best Restaurant Loans 2016

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

The sizzle of the grill and the cadence of a busy kitchen fuel the excitement of running a restaurant, but restaurateurs are familiar with the pitfalls: broken equipment, customer gripes, 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 not all business loans are created equal. Certain financing will be a better fit, depending on how you plan to use the funds. When doing your homework, check out the range of small-business loans that could work for your restaurant.

Restaurant loans for everyday expenses

Having access to funds to help cover everyday expenses — be it payroll or broken equipment — is crucial to keeping your restaurant up and running.

If your personal credit is lacking, Kabbage is a good option because the lender does not require a minimum personal credit score; qualifications are linked to alternate data sources, such as bank accounts or payment systems. However, you’ll pay higher borrowing costs with Kabbage. If your credit score tops 600, StreetShares offers a lower APR range, starting at 9%. The peer-to-peer lender does cap its loan amount at 20% of your annual revenue.

kabbage
Street Shares
Good option for:
• Bad personal credit
• Fast cash
• Good personal credit
• Working capital

Do you qualify?
• No minimum credit score
• 1+ year in business
• $50,000+ annual revenue
• Must have a business checking, payment platform or accounting software account

• 600+ credit score
• 1+ year in business
• $25,000+ annual revenue
Borrow:
$2,000 to $100,000$2,000 to $100,000
APR:
32% to 108%9% to 40%
Get started at Kabbage
Get started at StreetShares


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Restaurant loans for inventory

Food costs are a top challenge for restaurants, and those costs are rising, according to the National Restaurant Association’s 2015 industry forecast. If you need cash to buy nonperishable ingredients or paper goods for your restaurant in bulk, Dealstruck offers an inventory line of credit to help you cover the cost. OnDeck is another solid option for a line of credit. Unlike Dealstruck, though, OnDeck’s line of credit can be used for both perishable and nonperishable items.

Both OnDeck and Dealstruck require a minimum 600 personal credit score, but OnDeck has looser qualifications; you only have to be in business nine months compared with Dealstruck’s 12, and your revenue needs to top $75,000 versus Dealstruck’s $150,000.

ondeck

Line of credit

Dealstruck
Good option for:
• Good personal credit
• Businesses with strong cash flow
• Retail or food service businesses
• Good personal credit
• Recurring inventory purchases

Do you qualify?
• 600+ personal credit score
• 9+ months in business
• $75,000+ annual revenue
• 600+ credit score
• 1+ year in business
• $150,000+ annual revenue
Borrow:
Up to $100,000Up to $500,000

APR:
14% to 40%19% to 31%
Get started at OnDeck
Get started at Dealstruck


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Restaurant loans for big investments

You’ve established yourself and are going strong. Now you’re looking for financing to renovate, open a second location or invest in new equipment. SmartBiz and Funding Circle offer low-cost term loans to help you meet larger expenses. SmartBiz provides SBA loans through its online platform, connecting you with the lowest rates — 7% to 8% — among online alternative lenders. Funding Circle offers competitive APR for long-term growth capital, from 8% to 33%.

Both lenders require at least two years in business, but they differ in revenue and personal credit score requirements. To qualify for SmartBiz, you need at least a 600 personal credit score, $50,000 in annual revenue and strong cash flow. You also must meet the SBA’s stringent application requirements. In contrast, Funding Circle does not require a minimum annual revenue. The lender, however, has a higher credit score threshold at 620.

smartbiz
fundingcircle
Good option for:
• Good personal credit
• Low rates
• SBA loans
• Good personal credit
• Established businesses
• Growth capital
Do you qualify?
• 600+ personal credit score for loans $30,000 to $150,000
• 675+ score for loans over $150,000
• 2+ years in business
• $50,000+ annual revenue
• 620+ personal credit score
• 2+ years in business
• No minimum annual revenue required
Borrow:
$30,000 to $350,000$25,000 to $500,000
APR:
7% to 8%8% to 33%
Get started at SmartBiz
Get started at Funding Circle


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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%
OnDeckForTable

Line of credit

Get started at OnDeck
Bad personal credit
• Retail or food service businesses
• 600+ personal credit score
• 9+ months in business
• $75,000+ annual revenue
• Up to $100,000
• 14% to 40%
Dealstruck

Get started at Dealstruck
Good personal credit
• Businesses with recurring inventory purchases
• 600+ personal credit score
• 1+ year in business
• $150,000+ annual revenue
• 100% of outstanding invoices up to $500,000
• 19% to 31%
smartbiz
Get started at Smartbiz


Good personal credit
• Low rates
• SBA loans
• 600+ personal credit score for loans $30,000 to $150,000
• 675+ score for loans over $150,000
• 2+ years in business
• $50,000+ annual revenue
• $30,000 to $350,000
• 7% to 8%
FundingCircleLogo

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
• 8% to 33%

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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 lender trustworthiness, market scope and user experience, among other factors, 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: jzimmermann@nerdwallet.com. 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 Aug. 26, 2016. 

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