Restaurant Business Loans

Get access to revolving funds when you need it most

Dane Panes

January 25, 2022

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Grow Your Business with Restaurant Business Loans

In the food industry – or any business industry, for that matter – there can be good days and there can be bad days. What determines a good or a bad day is not always clear, and it is definitely not predictable. Despite the unpredictability, your business is always going to have to pay expenses and day-to-day operations.

Another factor to consider is growth; but, while expansion opportunities offer long-term sustainability, they definitely take working capital to get started.

A restaurant business loan can help you make it through slow periods of business and can help you seize growth opportunities to maintain and expand your restaurant business.

SMB Compass is dedicated to helping our clients’ businesses grow, by providing you with the funding you need. We handle your financial concerns so you can focus on what truly matters: serving your customers with delectable meals that will keep them coming back for more.

Whether you want to expand your existing store or branch out, restaurant business loans can help you cover the expenses. Whether you need funds for expanding, purchasing equipment or hiring new employees, a restaurant business loan can help you during successful times, or cover your payroll or expenses to vendors during a seasonal slump.


If a refrigerator, oven, stove, or another piece of equipment suddenly needs to be replaced or repaired, restaurant loans provide a quick solution. With readily available cash, you can purchase new equipment and keep your business running.

SMB Compass knows how hard it is for restaurateurs to qualify for a business loan. That’s why we make it a point to work with you and help you find the best restaurant business loans in the market.

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How Restaurant Business Loans Can Help Your Business

Every restaurant business owner will agree that having ample cash flow is the key to success. Without working capital, it’s impossible to run a profitable restaurant. In fact, many restaurant owners’ partner with financial lending companies in order to obtain quick access to working capital when they need it.

From improving your marketing strategies to buying new kitchen equipment, here are some of the ways you can use the funds from restaurant loans:

1. Improve Marketing

Your business will miss out on opportunities if you don’t have an established online presence. Having a mobile-friendly, content-rich website and social media presence will improve your online profile. More of a presence online means more potential customers will notice your brand, despite being in a competitive market.

Creating a fully-functional website with advanced ordering capabilities, real-time order status updates, and integrated customer reviews doesn’t come cheap. A restaurant business loan can help you cover the expenses of developing a website and establishing a strong online presence.

2. Renovate / Expand Your Restaurant

A restaurant business loan and restaurant financing is ideal if you’re looking to renovate, repair, or expand your restaurant to make it look more presentable and more profitable.

Restaurant financing will help you to expand your  restaurant. Expanding your restaurant means more room to seat and serve more customers daily. Improving the kitchen and storage area means that business operations become more organized and efficient, which results in fewer mistakes, faster orders, and happier customers. 

3. Purchase Inventory

If you always run out of a certain ingredient and you can’t afford to increase your inventory orders, you might consider applying for restaurant business loans. The funds from the loan allow you to purchase enough inventory to run your restaurant and even add new dishes to your menu, after all, it’s no secret that variety is a spice of life.

4. Hire Restaurant Staff

An understaffed restaurant will sooner or later reflect directly on its level of customer service. Your customers will quickly notice this, causing them to hesitate before dining at your restaurant again.

On the other hand, hiring more waiters, hosts, cooks, and other employees can be expensive. However, with the funds from a restaurant loan, you can easily hire more restaurant staff to ensure your restaurant operates efficiently without a hitch.

5. Create a Loyalty Program

Customer loyalty is invaluable to any business, including restaurants. The loyalty of your customers makes or breaks your business. Launching a loyalty program incentivizes customers to return to your restaurant as well as promote it to family and friends.

6. Buy New Equipment

Your once-new kitchen equipment will eventually need costly repairs. By applying for a restaurant business loan, you will have the funds to purchase new equipment or repair old ones. You can even use the equipment you’re going to purchase as collateral, depending on the type of loan you apply for.
how to apply for loan

How to Apply for a Restaurant Business Loan through SMB Compass

You can count on SMB Compass to help you find the right loan from the right lending company. Here’s how you can apply for a restaurant business loan today:

1. Prequalify for a Loan by Filling Out Our Online Application

You can begin by filling out a simple application detailing your name, business name, email, phone, and loan amount. Once you’ve submitted your application, our financial experts will reach out to you and ask you for more information about your business’s goals and needs. SMB Compass will then assess your company to see which lending sources are just right for you.

2. We Will Find a Reputable Lender for You

Once we are able to assess what you’re looking for, our financial experts will pair you with an experienced and reputable lending company that has experience in your industry.

It’s not only a goal of ours to find you a lender and a loan that fits your restaurant’s needs, but it’s our area of expertise. SMB has secured funding for 1000 + businesses from across the U.S., and we can do the same for you.

3. Compare Different Offers with Our Financial Experts

Comparing different loan offers from different lenders claiming to be the best can be overwhelming.

That’s why our lending experts patiently walk you through every detail of your offers. Our financial specialists are trained to assess and spot the very best loan product for you.

4. You Choose the Loan that’s Best for You

After you’ve compared all your options, it will be easier for you to confidently move forward with your decision. With the help of SMB Compass, you can find the loan product that suits your restaurant’s needs and goals.

5. Work on Running Your Business

Depending on the type of loan you chose, you’ll be able to receive funding within 24 to 48 hours.

Once the funds are deposited into your account, you can immediately use them when you need them, and where you need them. The good news is, with access to enough working capital, you can focus on successfully running your restaurant.


Paperwork Needed to Apply for a Restaurant Business Loan

Paperwork Needed

Keep in mind that the requirements needed depend on the type of loan you’re applying for. Generally, you will likely need the following documents:

  • Business Plan
  • Personal History and Financial Statements
  • Projected Business Financial Statements
  • Profit and Loss Statements
  • Business License/Certificate
  • Ownership Documents
  • Personal Resume
  • Business Overview
  • Income Tax Returns

Business Line of Credit


  • Available Working Capital During Slow Seasons: Seasonal businesses can benefit much from a business line of credit. During slower seasons, you’ll have the cash you need to pay for operational expenses and more.
  • Only Pay for What You Use: Regardless of the credit limit offered to you, you only need to pay for the money you used. Also, you can repay the loan anytime most since lenders don’t charge a prepayment penalty.
  • Seize Business Opportunities: If you’re faced with an opportunity that’s too good to pass up, you can use the funds from a business line of credit to seize business opportunities and take your business to the next level.


  • Low Loan Amounts: Compared to other types of loans, lines of credit have a relatively low borrowing limit. If you need money for new equipment, expansions, or renovations, you might benefit more from another type of loan.
  • Fees: While a business line of credit isn’t as expensive as business credit cards, it does have a higher interest rate. Some lenders even carry hidden fees that could significantly increase the cost of the loan. SMB Compass will help you find honest and transparent lenders that actually care about your business.
  • More Challenging to Qualify: You need to submit financial statements, personal and business tax returns, bank account details, business documents, and more. In most cases, you’ll need a strong credit rating and at least two years of business history.

Equipment Financing


  • Flexible Terms: Equipment financing generally has more flexible terms compared to a traditional business loan.
  • Quick Turnover: You don’t have to wait for months to receive the capital you need to purchase equipment. We’ll connect you to fast and efficient lending companies, so you can quickly buy the equipment you need.
  • Improve Credit Rating: By making payments on time, equipment financing can help you build and improve your credit rating.


  • Risk Involved: Just like any other loan, there’s a level of risk involved with equipment financing. You need to ensure that you’re able to repay the loan until the end of the agreement.
  • Limited to Equipment Use: As the name suggests, you can only use equipment financing to purchase or lease equipment.
  • May Require Personal Collateral: Lenders may ask for a personal guarantee to secure the loan. This holds you liable for payments if you can’t repay the loan.

SBA 7 (a) Loans


  • Low Down Payment Requirements: Most lenders require a 20% down payment to secure a loan. For 7(a) loans, lenders can accept down payments for as low as 10%. This allows you to preserve personal assets and free up working capital that would’ve been used as a down payment.
  • Easy to Secure: The SBA guarantees 75% to 85% of the loan, reducing lenders’ risk, and incentivizing them to approve your application.
  • Lower Interest Rates and Long Repayment Terms: To protect small business owners and to help them afford their options, the SBA sets a maximum interest rate for their loan programs. Regardless of the interest rate, 7(a) loans generally have low-interest rates and long repayment terms.


  • Laborious Application Process: If you apply for an SBA loan, you’re going to work with SBA-approved lenders rather than the SBA itself. 7(a) loans often take a month or two to approve.
  • Often Require Good Credit: Lenders are very strict when it comes to credit and business history. You generally need a credit rating of 620 or higher to increase your chances of approval.
  • Personal Collateral: Liens on properties are common for SBA loans. If you have valuable personal assets, lenders may ask you to use them to secure the loan. They could seize your property if you fail to repay the loan.

Business Term Loans

A business term loan is the classic loan structure; lenders give you a lump sum and you repay the loan in fixed monthly payments throughout an agreed borrowing period. You can use the funds from a business term loan for almost every business need, working capital, equipment purchases, emergency expenses, or hire more employees.


  • Higher Loan Amounts: Regardless of the lender you’re working with, business term loans often have higher loan amounts compared to other financing options. You can qualify for up to $5 million.
  • Lower Interest Rates: Unlike short-term financing options, business term loans charge lower interest rates and annual percentage rates (APRs).
  • Budget Your Cash Flow Properly: Since you repay the loan in fixed monthly payments, you can properly budget your finances, ensuring that you can repay the loan throughout the repayment term.


  • Personal Guarantee: Lenders require a personal guarantee to borrowers to offset the risk they’re taking. This means that you agree to be personally liable in case you default on the loan.
  • Higher Credit Limit: Lenders will also check both personal and business credit and your financial history as well. Before applying, make sure that your credit history is updated and your score meets the requirement.
  • Profitable Business History: Lenders also need to know that your business is profitable. They usually need at least two years of financial history.

Top 3 Restaurant Business Loans for You

SMB Compass will work closely with you to help you find the best restaurant business loan depending on your business’ needs. Here are our top three picks for restaurants/bars:
Top 3 Restaurant

SBA 7(a) Loans

The Small Business Administration (SBA) guarantees a certain percentage of SBA loans for restaurants. Small business loan for a restaurant makes an SBA 7(a) loan ideal for small business owners that are seeking financing for their restaurant. Based on SBA , to qualify your 7(a) loan for your small business loan for a restaurant it must make a profit as much as you can.


The SBA loan for restaurant can be used to improve marketing efforts, add a new location, or make it through an off-season. There are no strict restrictions as to how business owners can use the funds, so an SBA loan for restaurant can cover most business expenses. SMB Compass will work with you to set competitive terms, rates, limits, and repayment schedules that suit your business’ needs and goals.

Equipment Financing

The equipment you’re using contribute much to the quality of service and food you offer. Equipment financing provides your restaurant with the funds you need to purchase new equipment. Our team of trusted advisors will work closely with you to determine the terms for your loan depending on the personal credit, trade history of the business, the financial strength of the company, and the type of equipment purchased.

Business Line of Credit

Lenders set a maximum credit amount, and your business only has to repay the sum you’ve withdrawn (plus interest). For example, if you are approved for a $100,000 line of credit, and you’ve only spent $20,000 in the first month, you only need to pay the $20,000 and the interest.

Like a credit card, a business line of credit is revolving. This means that once the debt is paid, your line of credit is automatically renewed so you can use it again. The terms of this loan depend on your business credit, personal credit, and cash flow. Lenders prefer applicants with strong cash flow and great operating history.

Learn About Your Financing Options

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