Restaurant business loans provide working capital to buy equipment, hire employees, or pay your bills during a slow time. Plenty of funding options exist from direct to alternative lenders. However, your interest rates and term length will vary by loan type, credit score, and revenue. Selecting an online lender can get funds into your account within days, whereas traditional bank lenders may take weeks.
We reviewed 30 lenders to determine which ones offered a convenient application process, loans for various use cases, and features to manage your loan. We narrowed our list down by reviewing total costs, customer reviews, and perks, such as discounts for paying your loan off early. Our evaluation turned up eight providers offering the best restaurant business loans.
The Best Restaurant Business Loans for 2021
Best Overall : Fora Financial
Get restriction-free funds and 24-hour loan approvals combined with responsive customer service.
Early payment discounts
No minimum credit score requirement
Short loan payment terms
Higher fee structure
Required daily or weekly payments
Fora Financial is a direct lender offering working capital for small business owners, including restaurateurs and food truck owners. Its one-page application and fast approval process make Fora Financial the best overall restaurant business loan provider.
With a short-term loan or merchant cash advance from Fora Financial, you can get $5,000 to $500,000 for use within 72-hours after approval. The lender lets you pre-qualify for funds without affecting your credit score, and the one-page application is straightforward.
Both the loan and merchant cash advance come with no restrictions on use with no collateral required. Fora Financial doesn’t rely solely on your credit score to make a determination. Instead, the lender looks at your restaurant’s revenue and years in business. The minimum requirements for funding are:
- Six months in business
- $12,000 minimum gross monthly sales for a loan
- $5,000 in monthly credit card sales for a merchant cash advance
- No open bankruptcies or bankruptcy dismissals within the past year
Fora Financial provides flexible terms, giving you up to 15 months to pay back your loan. Or, if you opt for a merchant cash advance, you pay a percentage of your credit card transactions with no set terms.
Unlike other lenders, Fora Financial doesn’t charge an annual interest rate (APR). Rather the company uses factor rates, which vary from 1.1 to 1.3, based on your current financial situation. On a $5,000 loan with a 1.1-factor rate, you’ll pay an extra $500, whereas that jumps to $50,000 on a $500,000 loan. Origination fees vary between 1% to 4% of the borrowed amount, with the average being 2.50%.
Once you’ve paid off more than 50% of your loan, you may qualify for additional funding. Fora Financial has a department dedicated to loan renewals, making it easy to get more cash. Although Fora Financial receives great reviews and responds to positive and negative ones, it doesn’t publish its interest rates or fee structure.
Best for SBA Loans : SmartBiz
Since roughly “90% of qualified applications” referred to banks get funded, getting an SBA loan through SmartBiz is a great solution.
Quicker process than a conventional SBA loan through a bank
Competitive rates with many lender options
Helpful customer support when applying for your loan
Strict government requirements
A minimum of three years of business documents
A personal guarantee and lien against your business are required
SmartBiz partners with a network of banks to help you secure a loan through the United States Small Business Association (SBA). Although SBA loans can be complex, the SmartBiz platform simplifies the process and connects you with the right lender for your financial situation. If you need great rates and loan terms but don’t want to deal with a bank, SmartBiz is your option for SBA loans.
Although SmartBiz specializes in SBA loans, you can also secure Paycheck Protection Program (PPP) loans, bank loans, and alternative financing. After a five-minute pre-qualification process, you can select loan options, such as:
- SBA 7(a): $30,000 to $350,000 for working capital, equipment purchases, or refinancing existing business debt
- SBA Commercial Real Estate: $500,000 to $5 million for buying or refinancing 51% owner-occupied commercial real estate
- PPP: Secure a loan for 2.5 times your average monthly payroll expenses up to $10 million
- Bank term: $30,000 to $500,000 for debt refinancing, hiring employees, equipment, marketing, inventory, construction, and more
- Alternative: You can connect with lenders to secure invoice financing loans, credit cards, or business lines of credit with varying rates
SmartBiz offers a convenient sliding scale calculator and transparent fee structure, making it easy to see what you’ll pay before applying. Typical terms consist of:
- Interest rates: 4.75% to 7%
- Repayment terms: 10 to 25 years
- Application fees: A one-time charge of up to $5,000
- SBA guarantee fee: Rates based on the loan amount, 1.7% to 3.75%
- Bank closing costs: Working capital loans cost $450, and commercial loans can cost up to $5,000
SBA loans usually take longer to process, but SmartBiz says it’ll take about seven days, which is less than traditional banks. You can qualify for a loan if you’ve been in business for two years, earn enough monthly revenue to make payments, and don’t have any recent foreclosures or bankruptcies.
Best for Restaurant Equipment Financing : Crest Capital
Spend less on upfront expenses with no hidden costs and a four-hour turnaround time for equipment financing under $250,000.
Many loan and lease options available
Will finance 100% of equipment costs plus soft expenses
Fast approval and funding
Good credit required
Not for startups
Loans over $250,000 require more paperwork
Since 1989, Crest Capital has helped small to medium-size businesses secure the equipment, vehicles, or software required to keep their company running. Unlike other lenders, Crest Capital fully funds 100% of your equipment costs plus covers soft fees, such as delivery and installation, making it best for restaurant equipment financing.
As a national lender, Crest Capital offers several types of equipment loans and leases. Plus, you can add an unrestricted working capital loan to any equipment funds. Your options include:
- Equipment finance agreement (EFA): A fixed-rate equipment loan
- Guaranteed purchase agreement (PUT): Either a fixed-rate loan or a loan with a balloon payment
- $1 purchase agreement: A lease that works like a loan; when it ends, you pay $1 to buy your equipment
- First amendment lease: You lease the equipment and, at predetermined points, you can renew or purchase the equipment
- 10% purchase option: A fixed monthly payment, and at the end of the lease, you can buy the equipment for 10% of its original value, renew, or return the equipment
- Fair market value (FMV) option: A low monthly lease payment, and you can renew, purchase, return, or upgrade equipment
- Operating lease: Equipment loans for items with strong aftermarket value
You can choose various plans for all of the above options, such as a line of credit, step-up payments, deferred payments, or seasonal payments. You can access an online calculator by inputting your email address or get an instant eligibility check. Requirements and terms consist of:
- 24- to 74-month term length
- $5,000 to $500,000 financing
- Up to 25% of the loan can be soft costs
- Must be in business at least two years
- Need a 650 credit score
- Interest rates start at 5%
- $275 administrative fee
- One-month down payment
The application process is simple, and the company allows the financing of used or new equipment. Furthermore, you can even purchase from a private party.
Best for Surviving a Slowdown : Fundbox
Get through a slow time with a flexible line of credit that you can access when you need it and only pay for what you use.
No origination fees
550 minimum credit score
No penalty for early payoff
Business lien required
Only offers funds up to $150,000
Initially, Fundbox offered only invoice financing. However, the company now offers lines of credit and term loans. If you anticipate needing funds to get through a recession or cover out-of-season expenses, a flexible line of credit from Fundbox is best for surviving a slowdown.
When business starts to slow, you may need funds to cover basic expenses until your revenue situation improves. However, you may not know how much money you’ll need and it can be risky to get a lump sum term loan that you can’t pay back. Fundbox offers simple borrower requirements, meaning even if you’re seeing a decrease in business, you can still qualify for a loan. Fundbox only requires “two months of activity in any supported accounting software or three months of transactions in a business bank account.”
Once approved, you can draw funds at any time and the money gets transferred into your account by the next business day. You only pay interest on the amount drawn, and each time you pay it off, you have access to the full line of credit again.
For each loan option, interest rates start at 4.66%. But these rates vary based on your credit score and loan terms, so shorter loan terms may secure you a better interest rate. Plus, rates may change over time. For Fundbox’s short-term loan example, the company shows an average rate of 8.33% for 24-week terms and 18% for 52-week periods. In most cases, a line of credit from Fundbox is a better option than relying on your personal or business credit card. Loan types include:
- Line of credit: 12- to 24-week installment plan
- Term loan: 24- or 52-week plan
With no restrictions on funds, you can use the money to survive a downturn and pay your loan off early without prepayment penalties.
Best for Short-Term Loans : ARF Financial
Choose from five short-term loan options and get funds within three days with no collateral required.
Discounts for paying off your loan early
Multiple loan options
12- to 35-month loan terms
High interest rates
Loans based on a percentage of annual revenue
ARF Financial is a financial services company offering several unsecured loan options and flexible payment terms. Although ARF Financial lends to several industries, it focuses on food and beverage businesses. The ARF Financial experts work with you to find the terms for your needs, making the alternative lender best for short-term loans.
With ARF Financial, you can secure a loan for up to $1 million. The total loan amounts are based on a percentage of your annual sales, and the company works with people who have credit scores of at least 551. Examples of loan amounts are:
- 12-month terms: 6% to 11% of annual sales
- 18-month terms: Up to 16.5% of annual sales
- 24-month terms: Up to 22% of annual sales
- 36-month terms: Up to 33% of annual sales
You may be able to get a loan even if you’ve only been in business for a few months. ARF Financial funds businesses, such as:
- Single unit restaurants
- Multi-unit restaurants, franchises, and quick service
- Bars and taverns
- Bakeries and cafes
- Specialty food shops
- Mall food outlets
- Gourmet food stores
Choose from loan terms of 12, 18, 24, or 36 months with lower interest rates for shorter loan terms. Interest rates start at 16%, and there’s an administrative charge of 3% of the borrowed amount. Loan types include:
- Interest-only flex-pay loan: Interest-only payments for up to five months, then you can pay off the principal or roll it over for up to 60 weeks
- Flex pay loan: Defer up to 50% of your loan principal and get a renewable line of credit to use over six months
- Line of credit: Only pay interest on the money you take out, with up to five loan drafts over six months
- Bridge loans: A bridge loan is a flexible line of credit that fills the gap in funds while you’re waiting on approval for a larger traditional or SBA loan
Best for Bad Credit : Credibly
Even with below-average or poor credit, you can get approved and access funds within five days.
Only need a credit score of 500 to qualify
A range of loan options
No hidden fees
High interest or invoice factor rates for poor credit
Daily or weekly payments required
Some loans take up to five days to receive
Since 2010, Credibly has loaned more than a billion dollars to over 19,000 small to medium-size enterprises. If your credit score doesn’t qualify you for a traditional loan, Credibly can help you get the money you need. The company works with business owners with scores as low as 500, making Credibly best for bad credit loans.
Most lenders require credit scores of 550 or higher to secure a loan. However, Credibly has minimal borrower requirements, meaning you only need a personal Fair Isaac Corporation (FICO) score of 500 to qualify. Moreover, the company considers the overall health of your business, so it doesn’t rely solely on your credit score.
For a business line of credit, you’ll need a slightly higher credit score of 560. You also must be in business for six months and show a three-month average revenue of $15,000 for working capital loans and $50,000 in annual income for a line of credit.
Loan amounts can range from $5,000 to $400,000, and most business owners get funding within 48 hours, but it can take up to five days. You can choose from different loan types, such as:
- Working capital loan: Up to $400,000 and 6- to 18-month loan terms
- Merchant cash advance: Up to $400,000 and 3- to 18-month terms
- Business expansion loan: Up to $250,000 and 18- or 24-month loan terms
- Business line of credit: Up to $250,000 and varying loan terms
Credibly charges a factor rate for working capital loans and merchant cash advances, starting at 1.15. Higher credit scores give you more favorable rates. The business lines of credit start at an interest rate of 4.8%. You’ll also pay a one-time loan origination fee of 2.5% of the total loan amount that comes out of your loan balance.
As an alternative lender, Credibly offers other options through its partners, such as equipment loans or leases and long-term loans.
Best for Quick Funding : Rapid Finance
Secure a small business loan and get funds in your account on the same day.
Accepts some lower credit scores
Several loan types available
More expensive than other loans
No clear rate and fee schedule
Not for startups
Rapid Finance is a financial services company that funds loans and works with other providers to offer several funding types. Although most loans take up to three days to deliver funds, Rapid Finance can get money into your account in less than 24-hours, which is why it’s best for immediate funding needs.
Loan terms, interest rates, and factor rates are based on your credit score, the number of years in business, and monthly sales volume. You can choose from several loan options, such as:
- Small business loans: Up to $1 million and 3- to 60-month loan terms
- Line of credit: $5,000 to $250,000 and up to 18-month terms
- SBA bridge loan: $5,000 to $1 million and up to 60-month payment terms
- SBA loans: $500 to $5.5 million and up to 30-year terms
- Invoice factoring: $20,000 to $10 million and up to 18-month loan terms
- Asset-based loan: $50,000 to $10 million and 6- to 36-month payment terms
- Commercial real estate: $75,000 to $2 million and 5- to 20-year loan terms
- Merchant cash advance: Up to $500,000 and flexible payment terms
All loans offer fixed payments on an automatic daily, weekly, or monthly basis. To apply for a loan, you must have a business banking account. But, Rapid Finance may waive this requirement for sole business owners.
The minimum requirements for most loans are two years in business and a 550 credit score. However, these differ according to the loan product. Although Rapid Finance doesn’t offer rate information online, it receives high ratings and responds to every review.
Best for Franchises : ApplePie Capital
Partner with a financial services company that’s dedicated to helping you finance, remodel, or refinance your franchise.
Long-term loans available
Offers loans for refinancing and remodeling
Financing available for first-time franchisees
No personal collateral required
Only for franchise companies
Personalized rate information with no online fee schedule
ApplePie Capital is a lending network that handles franchise companies exclusively. The provider partners with more than 40 different franchises and doesn’t place restrictions on the funds, making the loans best for franchises.
When ApplePie Capital was founded, it only offered its ApplePie Core loan. However, it now provides equipment financing, SBA loans, conventional funding, account receivable loans, and refinancing options. ApplePie services features:
- Five- to 10-year payment terms
- Interest-only grace period
- No prepayment penalties
- Fixed and variable rate options
- A minimum of $100,000 for loans and $15,000 for equipment financing
Since ApplePie works with many different lenders, the rates vary and are dependent on factors, such as what the funds are used for, credit history, and type of loan. If you’re financing a new franchise, you may pay a 20% down payment and must have a net worth equal to the loan amount. However, if you own an existing franchise, then you must show six months of profitability. Fees may include:
- Broker fees for loans can cost more than $2,000
- Origination fees may range from 3.5% to 5%
- Interest rates vary by the lender and may range from 5% to 9.5%
When you start your application, you can type in the name of the franchise. If the franchise you want to buy doesn’t come up, ApplePie Capital will work with you to secure a loan.
Traditional bank loans take weeks for approval and have stringent requirements. However, online lenders let you apply online quickly and often don’t require tons of paperwork. Instead, you simply connect your bank account or invoicing software, and the lender uses a read-only process to gather data. Many alternative lenders offer a range of loan options and support various business models.
Our top pick for best restaurant business loans is Fora Financial because of its food and beverage industry knowledge, fast funding, and straightforward application process. Moreover, the company considers many factors, such as years in business, to determine your rates and works with you to find the best funding solution.
|Company||Wins For||Key Benefits|
|Fora Financial||Best Overall||Restriction-free funds and 24-hour loan approvals|
|SmartBiz||Best for SBA loans||90% of qualified applicants get an SBA loan|
|Crest Capital||Best for Restaurant Equipment Financing||Buy new or used equipment from a business or private seller|
|Fundbox||Best for Surviving a Slowdown||Secure your funds with only three months of invoicing history|
|ARF Financial||Best for Short-Term Loans||12- to 36-month loan terms for all types of food and beverage businesses|
|Credibly||Best for Bad Credit||Qualify for a loan with a minimum credit score of 500|
|Rapid Finance||Best for Quick Funding||Same-day funding with many loan options|
|ApplePie Capital||Best for Franchises||Partner with a company dedicated to franchise funding|
Frequently Asked Questions
What Are Restaurant Business Loans?
Restaurant business loans are funds provided by a direct or alternative lender to companies in the food and beverage industry. Loans cover your working or operating capital needs. You can get money directly deposited into your account, open a line of credit, or use it to pay an equipment vendor. In exchange for a predetermined loan amount, you pay the lender daily, weekly, or monthly payments, including interest on your total loan amount.
What Can Restaurants Use Business Loans For?
Restaurant business loans can pay for most expenses, except for refinancing debt or buying property. However, some lenders offer debt refinancing and commercial real estate loans. Use your restaurant business loan to:
- Pay employees
- Buy inventory
- Upgrade equipment
- Purchase software
- Make repairs
- Increase your marketing budget
- Print new menus
Can I Get a Restaurant Business Loan With Bad Credit?
Although it’s difficult to find lenders when you have bad credit, it’s not impossible. You can get a restaurant business loan with bad credit as long as your credit score is at least 500. However, you will pay higher interest rates and fees. Bad credit lenders may require daily or weekly payments and want to connect to your bank account for automatic payments. Furthermore, some lenders require a down payment, a lien against your business, or a personal guarantee.
What Types of Loans Can Restaurant Owners Apply For?
Restaurant business loans can take many forms, and a lending partner can help you decide which option is best for your company. The different types of loans include:
- Short-term loans: Pay off your loan in 6- to 36-months by making daily or weekly payments
- Long-term loans: Secure funds and make payments for up to 30 years
- Equipment loans: Get money to buy restaurant equipment, software, or delivery vehicles
- Merchant advance: Agree to flexible terms with payments based on a fixed percentage of sales
- Lines of credit: Only pay for what you use, and once you pay it off, you can access more funds
- Small Business Administration loans: Government-backed loans with friendly payment terms
- Invoice factoring: Get a loan based on unpaid invoices, and when you collect the money, the lender gets paid
- Commercial real estate: Purchase property for your food and beverage business
How We Chose the Best Restaurant Business Loans
To determine the best restaurant business loans, we evaluated 30 direct and alternative lenders. We compared solutions by looking at business and credit requirements, loan types, and the minimum and maximum funding amounts. Furthermore, we examined the funding process, from what documents are required to how long it takes to get funds in your account. We also considered customer ratings and business use cases.