Best Restaurant Business Loans

How to Finance Your Restaurant

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A restaurant business loan is a type of loan that is designed to meet the unique needs of a restaurant business owner. It can be short-term or long-term and can be from an online lender or a bank. A restaurant business loan might be a good idea for your business if you need some extra working capital, want to make improvements, or purchase restaurant equipment. There are different types of loans that can be used to purchase an existing business, buy a franchise, build a new business, or purchase equipment. 

We reviewed more than a dozen restaurant business loans and chose the best ones based on customer reviews, terms, costs, and lending requirements. Read on to see which of our best restaurant loans is right for your business.

The Best Restaurant Business Loans for 2022

Best Overall : FORA Financial


FORA Financial

 FORA Financial

Why We Chose It: We chose FORA Financial as our best overall restaurant business loan because it offers fast funding, has lenient credit qualifications, and has excellent customer reviews.

What We Like
  • Approval not solely based on credit score

  • Loan approval in as little as 72 hours

  • Online loan monitoring

What We Don’t Like
  • May pay higher rates

  • Must already be in business for 6 months

  • Don’t loan over $750,000

FORA Financial has been in business since 2008 and offers two types of restaurant business loans. The application process is simple, doesn’t require any collateral, and offers loans in various industries, including retail, construction, service, and restaurants.

Loans range from $5,000 to $750,000 and come in short-term small business loans or merchant cash advances. Loan funds arrive in as little as 72 hours after approval. To get approved, which happens within 24 hours, you will need to fill out a one-page application, submit proof of business ownership, and submit your business bank statements along with other documents. You must be in business for at least six months, and typically gross monthly sales of $12,000 or more are required.  

Loan terms are up to 15 months. There are no origination fees. However, there are early payoff discounts, and no collateral is required. There is also no minimum credit score required. Instead, FORA Financial looks at your restaurant’s revenue and how long it’s been in business.

Customers like the knowledgeable and helpful agents and appreciate that they offer loans that other lenders would turn down.

Best for Franchises : Apple Pie Capital


Apple Pie Capital

Apple Pie Capital

Why We Chose It: Apple Pie Capital specializes in financing for franchises, knows the industry inside and out, and has dedicated agents to help you with the loan process.

What We Like
  • Knowledgeable about the franchise industry

  • Can be used for new or existing franchises

  • Loans for many purposes from equipment to new franchise units and more

What We Don’t Like
  • Loans are only for franchises

  • Application process can be time-consuming

  • No rates or fees published on site

Apple Pie Capital is our best restaurant business loan for franchises because of its specific industry knowledge and multiple types of loans. It’s a loan network dedicated to the needs of the franchise community. It offers traditional loans, Small Business Association (SBA) loans, restaurant equipment loans, and more. 

Terms range from five to 10 years, and they finance new and existing restaurant franchises. There are flexible collateral options, no prepayment penalties, and both fixed and variable rates. Loans can be used to finance equipment, build a new location, open up your first location, or anything related to the restaurant franchise. The company offers an interest-only grace period on new units and projection-based lending. 

Most loans at $100,000, but equipment loans start at $15,000. Loan fees and rates vary based on the lender and the borrower’s qualifications. Each lender in the network charges its own lender origination fees. 

The minimum credit score and documents required depend on the lender and type of loan, and funding depends on the same. Typically, SBA loans take longer to fund than other loans. 

Best for Short-Term Loans : Credibility Capital


Credibility Capital

 Credibility Capital

Why We Chose It: Credibility Capital is our recommendation for best short-term restaurant business loan because of its excellent customer reviews, multiple loan types, and easy online application process.

What We Like
  • Positive customer reviews

  • A large network of lenders allows you to be matched to one that fits your business

  • Fast loan eligibility determination online

What We Don’t Like
  • Loans only go up to 5 years

  • Business owner must have strong personal credit and personally guarantee the loan

  • Must be in business for at least 24 months

Credibility Capital is a small business lending platform that matches businesses with institutional investors to provide transparent loans to quality small businesses. It offers fully amortized loans with terms up to five years that can be funded within three days, making them our choice for best restaurant business short-term loans. 

The business owner must have strong personal credit and no personal or commercial bankruptcies in the last five years. You must own an existing business that has been running for at least 24 months, and although no collateral is required, the company does require a personal guarantee, and a UCC filing is placed on the business. 

There’s no application fee, and you can see your rates within minutes with only a soft credit pull. Typically, funding can happen as quickly as 72 hours and requires bank statements, tax returns, and other documentation may be needed depending on the type of loan. Loan amounts range from $50,000–$500,000. Terms are one, two, three, four, or five years and there are no prepayment penalties if you want to pay off the loan early. 

Credibility Capital has excellent customer reviews, with customers praising the fast funding times and customer service. 

Best for Equipment Financing : CurrencyFinance


Currency

 Currency

Why We Chose It: CurrencyFinance offers multiple types of loans that can be used for small and large equipment purchases with varying payment terms and it specializes in equipment financing.

What We Like
  • Multiple loan products

  • Specialize in equipment loans

  • Varying loan amounts for small and large purchases

What We Don’t Like
  • Customers complain about confusing loan documents

  • No online loan portal to monitor your loan

  • Lengthy application process for larger loans

CurrencyFinance, a division of Currency, is based in Arizona. The company provides equipment financing and working capital loans with fast funding and simple online applications. It also offers equipment financing with loans up to $500,000.

The minimum credit score for CurrencyFinance is 550, but they recommend a 625 for more options. However, there is no minimum time in business requirement, so it’s ideal for newer businesses. 

You can complete the application online in a few minutes, and funding is often very fast too. Typically, you need business bank statements, proof of ownership, and tax returns. Loans for up to $500,000 are available. Loan terms are up to 72 months.

CurrencyFinance has mixed reviews, with some customers complaining about confusing loan docs and not knowing what they signed up for. However, other customers like the simple online application, fast funding, and equipment financing knowledge.

Best for Low Rates : SmartBiz


SmartBiz

 SmartBiz

Why We Chose It: SmartBiz provides SBA loans and bank loans through its online platform with competitive rates starting at 4.75% for SBA loans.

What We Like
  • Competitive interest rates

  • Varying loan amounts

  • Prequalify in minutes

What We Don’t Like
  • SBA loans only have long terms

  • Minimum credit score needed to qualify

  • May take longer to fund than other lenders

SmartBiz is an online lending network that helps finance small businesses in different industries, including restaurants, retail, and commercial real estate. It matches your business with the lender most likely to approve your loan, streamlining the often-complicated SBA loan process. It also offers some of the best rates among online lenders. 

Rates for SBA loans range from 4.75 % to 7%, which are very competitive for restaurant business loans. These lower rates can help minimize your financing costs and make a loan more affordable. Rates for regular loans are higher than SBA loans but are very competitive for their loan type. You can prequalify online in five minutes, and it doesn’t affect your credit score. Loan funding times vary depending on the type and amount of the loan. A minimum credit score of 650 is needed.

The lender will also place a lien on the business until the loan is repaid. Your business must have strong financials, and some loans require two or more years of being in business to qualify. SBA loan amounts range from $30,000 to $5 million, terms are typically 10– 25 years, and fees vary depending on the loan type. 

It has excellent reviews with customers praising the customer service and loan product knowledge. It also offers a free tool to help you track the financial health of your business over time.

Best for Quick Funding : ARF Financial


ARF Financial

 ARF Financial

Why We Chose It: ARF Financial funds franchises and non-franchises within three days and offers multiple types of loans.

What We Like
  • Simple application

  • Fast loan funding

  • Multiple types of loans

What We Don’t Like
  • No terms over three years

  • Higher credit scores are most likely needed

  • Personal guarantee likely required

ARF Financial has been in business since 2001 and was founded to simplify the financing process for restaurant and hospitality business owners. It offers working capital loans, commercial bridge loans, flex pay loans, and lines of credit and has fast funding times, excellent reviews, and a focus on the food services industry. 

The lender looks at the overall health of the business, its revenue, what the loan will be used for, and the borrower’s credit score before approving or denying a loan. The application process is simple, online, and you can get an immediate quote and funding within three days if approved.

Loan costs depend on the type of loan and the terms offered. Terms range from 12–36 months, and once approved, you will have multiple types of loans to choose from with varying rates, terms, and loan amounts. This is a unique feature and helps customize the loan towards your business needs. 

ARF Financial customers appreciate how professional and easy it is to work with the company.

Final Verdict

All the restaurant business loans on our list have different things to offer, so choose the one that best suits your business needs. Some offer short loan terms with higher fees, others offer longer loan terms with competitive rates, and others have less stringent borrower qualifications. You can choose from an equipment loan, a merchant cash advance, or a small business loan. Loan amounts vary and typically start at $5,000 and go into the millions.

FORA Financial is our recommendation for best overall restaurant business loan because they offer loans with varying amounts and terms, don’t require good credit, offer fast funding, and have excellent customer reviews.

Compare Providers

Restaurant Business Loan  Why We Picked It  Unique Feature
FORA Financial Positive customer reviews and fast funding No minimum credit score
Apple Pie Capital Franchise industry experts Interest-only grace period on new units
Credibility Capital Short-term loans with fast funding Flexible underwriting requirements
CurrencyFinancial Specialize in equipment loans Offer varying loan terms with competitive rates
SmartBiz Competitive rates and long repayment terms Free online tools and resources to help keep track of your business’ progress
ARF Financial Fast funding times with multiple loans to choose from Instant quote won’t affect your credit

FAQs

What Is a Restaurant Business Loan?

A restaurant business loan is a specialty loan product designed for the restaurant industry. It may be a short-term or long-term loan, and it has varying rates, terms, costs, and qualifications. You can find a restaurant business loan at a bank, through an SBA lender, or an online lending platform. There are restaurant business loans for both existing restaurants and new restaurants. 

Can I Get an SBA Loan for a Restaurant?

Yes, certain SBA loans can be used for restaurants if you and your business meet the SBA guidelines. For instance, the SBA 7 (a) loan is often used to help purchase commercial real estate, working capital, and equipment for a restaurant. 

Keep in mind that SBA loans typically require certain revenue and credit score requirements to be met. The lender will also want to see your detailed business plan and financial statements. 

Who Should Get a Restaurant Business Loan?

You should get a restaurant business loan if:

  • You need funds to establish a new restaurant
  • Your existing restaurant needs working capital
  • You need to finance restaurant equipment
  • You want to make improvements to your restaurant
  • You want to fund the purchase of a franchise

Restaurant business loans are right for small and large restaurant owners, franchise owners, and those who want to open a new restaurant. If you don’t have the cash, don’t want to liquidate your assets, and can’t borrow money from friends or family, then a restaurant loan is a viable option. 

What Does a Restaurant Business Loan Cost?

There are different types of restaurant business loans with varying costs. Expect to pay interest rates starting from 4.75%. Depending on your circumstances, your rate could be much higher. Loan origination fees, administration fees, broker fees, and other loan fees are common as well. These can be as low as 1% or as high as 30% of the loan amount. 

The loan costs depend on the type of loan, amount, borrower qualifications, and loan term. Typically, the better your credit score and the longer your business has been open and producing revenue, the lower your loan costs will be. 

How We Chose the Best Restaurant Business Loans

We reviewed more than a dozen restaurant business loans before deciding on the top contenders. Factors we considered include the types of loans offered, if the lender specialized in restaurant loans, industry experience and reputation, and customer reviews. 

All of our top choices are lenders that have been in business for at least a few years and have mostly positive reviews as well as competitive loan rates, terms, and borrower qualifications.

Article Sources

  1. Fora Financial. "Fast Small Business Loans Are Available." Accessed Jan. 21, 2022.

  2. Currency. "Frequently Asked Questions." Accessed Jan. 22, 2022.

  3. CurrencyFinance. "Hassle-Free Financing To Build Your Business." Accessed Jan. 23, 2022.

  4. SmartBiz. "SBA (Small Business Administration) Loans." Accessed Jan. 24, 2022.

  5. SmartBiz. "SBA (Small Business Administration) Loans." Accessed Jan. 24, 2022.