If you live in a busy town, you’ve probably seen plenty of restaurants come and go. Despite their vital role in the community, this is one of the riskiest industries. There are too many reasons for a successful restaurant to run into financial trouble. Equipment can break down or become outdated. Employees can quit in pursuit of more normal hours. And to stay in such a desirable location, you must be prepared for astronomical monthly rental costs. United Capital Source has access to Restaurant Business Loans & Equipment Financing to help restaurants conquer these hurdles and continue serving their loyal customers.
To learn more about the many financing options for restaurants, please read on:
🍽️ Restaurant-Focused Financing: Tailored options for equipment, renovations, and seasonal needs.
💰 Flexible Loan Products: Working capital, MCA, SBA, equipment loans & more.
⚡ Fast Funding, Easy Process: Quick approvals—some funds available in 24 hours.
📉 Credit-Friendly: Approvals from 550+ credit scores and 6+ months in business.
🧠 Expert Help & Trusted Reputation: 5-star rated, BBB-accredited, and personalized loan guidance.
Restaurant Business Loans are business funding products geared towards restaurant cash flow cycles and recurring expenditures. A restaurant loan could help with hiring and training seasonal staff and other factors that help them succeed in the competitive restaurant industry.
Restaurant owners often need extra funding to prepare for the upcoming season. Rather than giving every restaurant the same product, we recommend the repayment structure and terms best suit your financial needs.
Thus, Restaurant Business Loans can come in the form of:
Restaurant Business Loans can address a multitude of business growth investments, expenses, and cash flow shortages. For example, if you’re looking to replace an expensive piece of equipment, we offer Equipment Financing in which your desired purchase is used as collateral. Very little paperwork is required, and you’d be able to secure the new equipment in as little as a few business days.
Restaurants tend to perform high volumes of debit and credit card sales. For this reason, we often recommend a Merchant Cash Advance when business slows down temporarily. You’d make smaller payments during slow periods, which frees up more cash to prepare for busy periods. Merchant cash advances are cheaper when your payments are spread out more widely. This repayment structure is ideal for highly seasonal restaurants or the countless restaurants in which demand can fall or drop at any moment.
Maybe one of your biggest obstacles is securing enough ingredients or supplies to meet these unexpected surges in demand. A Business Line of Credit can solve this common dilemma. You’d gain the means to purchase large orders when it’s most convenient for your cash flow cycle. And your interest would be minimal since you could pay off your balance quickly.
Many restaurants require expensive equipment, such as fridges, making equipment financing essential. With equipment loans, the restaurant equipment typically serves as collateral.
We offer Business Term Loans and SBA Loans for more substantial investments, such as adding another location or renovations. We can approve these products much quicker than banks, and your terms can even be customized to suit the estimated time frame of your investment. The Small Business Administration partially guarantees these loans.
The SBA 7(a) loan can be used for various expenses, including working capital, equipment, and real estate. SBA 7(a) loans can be used to buy, expand, or refinance an existing restaurant. SBA guarantees up to 85% for loans of up to $150,000 and 75% for loans greater than $150,000.
The SBA 7(a) loan interest rates vary based on loan size and maturity period. To qualify for an SBA 7(a) loan, a restaurateur must have reasonable equity to invest and operate a for-profit business in the U.S.
| LOAN TYPES | MAX AMOUNTS | RATES | SPEED |
|---|---|---|---|
| Merchant Cash Advances | $7.5k – $1m | Starting at 1-6% p/mo | 1-2 business days |
| SBA Loan | $50k-$10m | Starting at Prime + 2.75% | 8-12 weeks |
| Business Term Loan | $10k to $5m | Starting at 1-4% p/mo | 1-3 business days |
| Business Line of Credit | $1k to $250k | Starting at 1% p/mo | 1-3 business days |
| Receivables/Invoice Financing | $10k-$10m | Starting at 1% p/mo | 1-2 weeks |
| Equipment Financing | Up to $5m per piece | Starting at 3.5% (SBA) | 3-10+ business days |
| Revenue Based Business Loans | $10K – $5m | Starting at 1-6% p/mo | 1-2 business days |
Thanks to companies like United Capital Source, Restaurant Business Loans can be accessed quickly. The application requires minimal documentation, and the approval process can move fast. Funds can appear in your bank account in just a few business days. This is extremely important for restaurants, where unforeseen expenses and misfortunes are a constant struggle. In these situations, access to additional funds allows some restaurants to stay alive while others crumble.
During a state-mandated health inspection, you might be instructed to purchase a particular appliance or use a specific material for your tables. These expenses could easily exceed $10,000.
You might find out that your target audience now prefers delivery over going out to eat. With a business loan, you could immediately recruit a delivery service to show your customers that you understand their preferences.
Also, how many times have you been to a restaurant and observed that it was heavily understaffed? Slow service is one of the most popular complaints from restaurant patrons. Business loans allow restaurants to keep sufficient employees on staff when they would otherwise not have enough cash to do so.
Lastly, companies like United Capital Source regularly work with businesses that are just six months old. New business owners often have to spend hundreds of thousands of dollars within their first year of business in the restaurant industry. Little credit history or less than one year in business doesn’t have to stop you from getting the funding you need to get your restaurant up and running.
Since the restaurant industry is unpredictable, choosing the right business loan program for your needs can be challenging. Choosing the wrong product can pressure your cash flow and limit your growth capacity. And with so many products to choose from, it’s crucial to research each option before seeking funding. However, many restaurant owners would likely admit they are too busy to research business loan products while running their businesses.
The myriad of sudden expenses restaurants face also makes it hard to figure out how much to borrow. Asking for too little could leave certain expenses unaccounted for. On the other hand, asking for too much could cause you to have more debt than you can afford to pay back. Restaurant owners are more likely to commit the latter mistake since it often seems like another expense pops up every day.
When considering the number of potential expenses or slow periods ahead, calculating the right amount to ask for might seem nearly impossible. For this reason, some restaurant owners probably don’t even bother looking into business loans at all.
The amount of paperwork required depends on the product you choose. Funds can be approved and distributed for most products within 1-3 business days. Here’s how to apply
The first step is choosing the most sensible solution to the problem at hand. This should require some research, as each product is designed for different types of expenses and cash flow cycles. Are you looking to cover a short-term or long-term expense? Is demand expected to increase or decrease in the coming months?
Considering the funds’ purpose will also help us determine the correct borrowing and terms for your needs.
Here are the documents and information required for Restaurant Business Loans:
SBA Loans require additional documents and information, such as financial statements. To learn what’s needed for the SBA-backed loans, visit our SBA Loan page.
You can begin the application process by calling us or filling out our one-page online application. Either way, you’ll be asked to enter the information from the previous section along with your desired funding amount.
Once you apply, a representative will contact you to explain the repayment structure, rates, and terms of your available options. This way, you won’t have to worry about any surprises or hidden fees during repayment.
If you’re approved, you’ll hear back from us within 24 hours. Funds for Business Term Loans, Business Lines of Credit, Working Capital Loans, Equipment Financing, Merchant Cash Advance, Revenue-Based Business Loans, and Accounts Receivable Factoring should appear in your bank account from 24 hours to one week. For SBA Loans, it usually takes 3-5 weeks to receive funding.
Your business loan isn’t just a way to get financing for your business. It’s also an excellent opportunity to start building (or improving) your credit.
Regardless of the type of business loan you get, make all your required payments on time and in full. If you get a business credit line or another form of revolving credit, keep your balance below the credit limit.
Consistently making your business financing payments on time and in full will positively impact your credit. And that means preferred rates and terms when you next need business financing.
If we decline your application, you might have applied for the wrong product for your cash flow. We would likely recommend a different product with a less hazardous repayment structure in this case.
We might also decline your application after determining that you cannot afford more debt now. Instead, your needs and financial circumstances might be better suited for another financing tool, like a business credit card or personal loan. Both options can be accessed through UCS and are usually much easier to qualify for than business loans.
If your credit score is preventing you from accessing financing, you should consider our credit repair services. We can help you identify the issues that keep your score down and develop practical solutions for eliminating them.
This depends on where you apply and the product you have in mind. Bank loans tend to have products with the highest borrowing amounts, the lowest rates, and the longest terms. However, bank loans are also the most difficult to qualify for. You’ll need excellent credit, perfect cash flow, plenty of money in the bank, at least two years in business, and collateral. The application will also require significant paperwork, and you’ll have to wait several months to receive funding. Most lenders require a personal credit score of at least 600 for SBA 7(a) loan eligibility.
On the other hand, companies like United Capital Source have access to lenders with much looser requirements, such as online lenders, and you can get funded in a matter of days. Their products are more expensive than bank loans, but you can borrow up to $10 million. And unlike banks, the size of your requested borrowing amount won’t make you less likely to get approved. Most of their customers borrow around $25,000.
Business Term Loans and SBA Loans are the most difficult loans to qualify for, especially if you seek funding from a bank. To qualify for many loans, the requested loan must be unavailable on reasonable terms from non-government sources. Restaurants may have difficulty accessing these products due to their tumultuous cash flow and low profit margins. Traditional lenders like banks want their borrowers to maintain high bank balances every month. This shows you’ll have plenty of cash to pay off the debt after covering operational expenses. So, yes, it is hard for restaurants to access Business Term Loans and SBA Loans from banks.
However, turbulent cash flow is not a deal-breaker if you’re seeking funding through a company like United Capital Source. These companies regularly work with restaurants that experience occasional dips in revenue or lengthy slow periods due to seasonality. You can even get approved for multiple products with poor credit. Thus, it is not hard for a restaurant to access products from online or alternative business loan providers. These options can help fuel a restaurant’s growth.
Restaurant owners often spend heavily on inventory and equipment. Maintaining marketing to attract new customers costs time and money. Expanding marketing strategy is an ideal use of restaurant funding. Restaurant owners might also use funding to cover ad buys and run customer loyalty campaigns.
Restaurants can use business loans for a myriad of purposes. They include:
Yes, traditional and non-traditional business loan providers can distribute large loans that can be used to buy a franchise (like fast food chains), add a second location, or buy an existing business, regardless of industry. However, to qualify for high borrowing amounts and long terms, you must have excellent credit, healthy cash flow, and at least two years in business. Depending on how well you meet the other requirements, you may also have to provide collateral.
Most traditional banks consider restaurants to be high-risk and will not fund them. Banks have a reputation for declining loans for restaurants, even if they meet their general requirements. This may be because 80% of privately owned restaurants fail in their first three to five years of business.
Many restaurants also have low profit margins and are family-owned. Some banks might believe family members aren’t good business partners since their relationship with you can influence your decisions. These lenders also have complex loan application processes and require extensive documentation, such as balance sheets.
Banks don’t lend to any business (regardless of industry) with turbulent cash flow, mainly focusing on long-term financing. Many restaurants are seasonal businesses, and revenue fluctuates throughout the year.
Thankfully, companies like United Capital Source have no issue with turbulent cash flow. Products like merchant cash advances, business lines of credit, and revenue-based business loans do not require fixed monthly payments. You can use these products to cover operational expenses during temporary slow periods. Restaurants must operate legally to qualify for loans.
Alternative funding can support marketing strategies to increase restaurant traffic and revenue. Alternative lenders may approve financing for restaurants considered high-risk by traditional banks.
Alternative restaurant funding is often available more quickly than traditional loans, sometimes within one business day. Merchant Cash Advances (MCAs) provide a lump sum up front with repayments based on a percentage of credit card sales. Using alternative funding options may involve higher interest rates compared to traditional loans. There are no restrictions on the use of funds from alternative restaurant funding, allowing flexibility for growth strategies.
Yes, you can get a Restaurant Business Loan with bad credit. At United Capital Source, borrowers with bad credit can access the following products to acquire the necessary capital for their restaurants:
Most of these products carry shorter terms and are relatively easy to repay. When you have bad credit, you’ll receive shorter terms and higher rates to reduce default risk. However, if you have excellent cash flow or can provide collateral, you may be able to access higher borrowing amounts and competitive rates, even with bad credit. For example, the borrowing amount for a Merchant Cash Advance is based on your debit and credit card sales volume. If many of your sales come from these payment methods, you may be able to access up to 150% of your monthly debit and credit card sales.
Fraud Disclosure:
Please be aware that individuals have been fraudulently misrepresenting to business owners (and others) that United Capital Source, Inc. (“UCS”) can assist small businesses in receiving government grants and other forgivable business loans, when in fact those grants or loans do not exist or are not available. These individuals have ulterior motives and are engaging in the unauthorized use of the names, trademarks, domain names, and logos of UCS in an attempt to commit fraud upon unsuspecting small business owners.
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