Restaurant Financing

Restaurant financing refers to money arranged that can be used to open a restaurant, expand a current establishment, or buy a franchise. Restaurant financing can help cover equipment purchases, inventory, payroll, rent, utilities, and other operating expenses. Banks and other lending institutions are the traditional sources for restaurant financing, though there are many different ways to get business capital. Additional restaurant financing options might include:
  • Loans from the US Small Business Administration (SBA) may be an option. The most popular is the 7(a) Loan Guaranty Program.
  • Investors can be challenging, but can offer access to the necessary financial resources. Family, friends, accountants, and attorneys can often help bring in potential investors.
  • If you’re purchasing a business from someone else, look into seller financing. In this scenario, the seller finances the sale. This can be particularly helpful if you’re unable to meet a bank’s requirements.
  • Partnerships help owners to pool resources together, which can provide a solid source of funding. In restaurant financing, partnerships can help ease the burden of the individual by sharing it among the group.
  • Personal loans are sometimes viable options. For example, a home-equity loan can provide sole funding or supplemental funding. Do beware of putting your personal assets at risk for the good of your business—you may lose more than you bargained for.
  • Venture capital firms invest significant funds in companies and can be particularly interested in businesses promising expansion opportunities.
  • There can be alternative funding options, other than loans, available to some restaurants, such as factoring or credit card receivable funding .
Most experts agree, when considering your restaurant finance options, a combination of sources can help you get the best possible fit to your needs.


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