Opening or extending a restaurant with new equipment is very expensive, and the majority of business owners need more funds to pay for everything up ahead. Restaurant startup financing is a crucial step in order to spread out the expense of equipment and make it more cheap and controllable over time. Restaurant owners usually need help getting funds for their businesses.
Restaurant business loans give you access to working money to hire employees, purchase equipment, or settle your debts when business is slow. There are numerous funding possibilities, including direct and alternative lenders. However, your loan terms, durations, and interest rates will vary depending on the loan type, credit score, and income. Using an online lender, you can transfer funds into your account in days instead of weeks with a typical bank lender.
Best Restaurant Business Loans for 2022
Any small business owner will tell you that getting a business loan is difficult, but getting restaurant financing makes it even more difficult.
Restaurant owners who require business loans can get them from one of the many small business lenders available today.
SmartBiz: Best for SBA Loans
Crest Capital: Best for Restaurant Equipment Financing
ApplePie Capital: Best for Franchise
ARF Financing: Best for short-term loans
SmartBiz: Best for SBA Loans
Pros
- Quick funding compared to traditional SBA loans through a bank
- Wide range of lending options with competitive rates
Cons
- Stringent government requirements
- A blanket lien and personal guarantee are required against your business.
SmartBiz collaborates with a network of institutions to assist you in securing a loan through the U.S. Small Business Administration (SBA). The SmartBiz platform simplifies the application process and links you with the best lender for your financial position. Although, getting SBA loan for a restaurant startup can be complicated. SBA loans from SmartBiz are an alternative if you require good loan terms and interest rates but want to avoid working with a bank.
Even though SmartBiz focuses on SBA loans, you may still get bank loans and other forms of finance.
In contrast to traditional banks, SBA loans typically take time to process. However, SmartBiz estimates that it will only take roughly seven days. Suppose your business has been operating for two years. In that case, you earn enough monthly revenue to cover your debts, and if you haven't filed for bankruptcy or had any recent foreclosures, you may be eligible for a loan.
Crest Capital: Best for Restaurant Equipment Financing
Pros
- Quick approval and funding
- A variety of lease and loan options are available
Cons
- A good credit score required
- Not for startups businesses
Crest Capital is an equipment leasing and finance provider company. It provides application-only approval, which waives the need to submit documentation like tax returns. Application-only approval doesn't require account balances, financial statements, or balance sheets and enables same-day authorization. These small loans offer loan terms ranging from 24 to 72 months.
Crest Capital offers larger restaurant loans of up to $1 million with stringent restaurant loan requirements. These loans often have terms of 24 to 84 months.
Crest Capital demands a minimum credit score of 650 or higher. Businesses must also have been in operation for a minimum of two years to qualify.
ApplePie Capital: Best for Franchise
Pros
- Offers long-term loans
- Offers loan for remodeling and refinancing
- No personal collateral is required
Cons
- Only available for franchise companies
- No loans under $100,00
ApplePie Capital collaborates with a financial services provider committed to supporting your financing, refinancing, or remodeling your franchise.
ApplePie Capital is one of the few lenders that focuses on franchise financing. It's one of the few lenders that accept new franchisees, although its term loans have exorbitant starting amounts starting at $100,000. However, your personal net worth must be at least as much as the loan amount to be eligible. Additionally, under typical conditions, existing businesses must have been profitable for the previous six months.
You can start your application by typing the franchise's name. If the desired franchise is unavailable, ApplePie Capital will assist you in obtaining a loan.
ARF Financing: Best for short-term loans
Pros
- Various loan options are available
- Loan terms of 12 to 36 months are available
- Discounts for repaying loans early
Cons
- Weekly payments
- High restaurant loan interest rates
- Loans depend upon annual revenue
ARF Financial is a provider of financial services that offers flexible payment arrangements and a variety of unsecured lending options. ARF Financial specializes in lending to food and beverage companies despite serving various industries. Since ARF Financial analysts collaborate with you to determine the conditions that meet your requirements, the alternative lender is great for short-term loans.
You can get a loan from ARF Financial for up to $500,000. The company works with clients who have credit scores of a minimum of 551 and determines the total loan amounts on a percentage of your yearly revenue.
If your business is only a few months old, you could still be able to receive a loan.
Bottom Line
Traditional bank loans have strict standards and a lengthy approval process. Online lenders, however, allow you to apply quickly and frequently and don't demand a ton of paperwork. Instead, you only link your bank account, and the lender gathers information through a read-only method. Numerous alternative lenders support different company types and provide a range of lending possibilities. Our top choice for the best restaurant business loans includes SmartBiz, Crest Capital, ApplePie Capital, and ARF Financing.
