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.
We’ve outlined the best restaurant financing options online.
Restaurant loans: Compare your optionsIn the table below, scroll to the right to see all lenders.
For more details based on purchase needs
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.
- Pro: No minimum personal credit score requirement (but Kabbage does check your credit)
- Con: High interest rates compared with some options
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.
- Pro: Only need $75,000 in annual revenue to qualify
- Con: Funding capped at 20% of your revenue
- Loan amount: $2,000 to $250,000.
- APR: 24% to 99%.
- Loan term: 6, 12 or 18 months.
- Funding time: A few minutes to several days.
- Read our Kabbage review.
- Loan amount: $2,000 to $250,000 for term loans; $5,000 to $250,000 for standard line of credit; Up to $2 million for invoice factoring and government contract financing
- APR: 9% to 40%; 1% to 5.5% for select products
- Loan term: 3 to 36 months
- Funding time: 1 to 5 days
- Read our StreetShares review
Outside of loans, you can also consider a business credit card to fund your small restaurant purchases. Though your line of credit may be smaller 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%.
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.
- Pro: Low rates between 8.53% and 9.83% APR
- Con: Application process is longer and requires more documentation compared with other online options
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.
- Pro: Competitive rates with fast financing from a lender familiar with the restaurant industry
- Con: Terms max out at three years
- Loan amount: $10,000 to $350,000
- APR: 10% to 25%
- Loan term: 1, 2 or 3 years
- Funding time: 7 days on average
- Read our Credibility Capital review
SBA 7(a) Loan
- Loan amount: $30,000 to $350,000
- APR: 8.53% to 9.83%
- Loan term: 10 years
- Funding time: As quickly as seven days but typically several weeks
- Read our SmartBiz review
If you’re looking for quick approval: OnDeck uses an online application process that can take as little as 10 minutes for term loans of up to $500,000.
- Pro: Requires a minimum personal credit score of only 500 to qualify (but most borrowers have 660 or higher)
- Cons: Paying the loan back early won’t save you any money; interest rates can be high if you have a lower credit score
- Loan amount: $5,000 to $500,000.
- APR: 16.7% to 99.4%, as of Q1 2018
- 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.
*APRs change quarterly
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.