Live market data
Pulled from official U.S. government APIs. Click a card to view the source.
TL;DR
The best business loans for restaurants are merchant cash advances (funding as fast as 24 hours (subject to approval), revenue-based), working capital loans (3–24 months, $5K–$1M), and equipment financing for kitchen buildouts. SBA 7(a) loans offer competitive rates (from 6.5% APR) but take 30–60 days. Most restaurants qualify with $35K+ monthly deposits and 6+ months operating.
Why restaurant financing is different
Restaurants run on tight margins (5–10% net), card-heavy revenue, and seasonal swings. Traditional bank loans rarely fit because they want 2 years of tax returns, strong DSCR, and personal collateral. Revenue-based products like MCAs and working capital loans were built for exactly this profile — they underwrite trailing deposits, not net income.
Top 5 financing options for restaurants
- •Merchant cash advance — funding as fast as 24 hours (subject to approval), $5K–$2M, 1.15–1.49 factor, repaid as % of card sales
- •Working capital loan — $5K–$1M, 3–24 month terms, fixed daily/weekly remittance
- •Equipment financing — up to 100% LTV on kitchen, refrigeration, POS gear; terms to 7 years
- •Business line of credit — revolving, $10K–$1M, draw what you need for seasonal swings
- •SBA 7(a) — competitive rates (from 6.5% APR), longest terms, but 30–60 day close
Pros and cons by product
- •MCA pros: fastest, lowest credit threshold. Cons: highest cost, daily debits.
- •Working capital pros: predictable payment, better pricing than MCA. Cons: 600+ FICO preferred.
- •Equipment pros: tax-deductible (Section 179), low rates. Cons: tied to specific asset.
- •Line of credit pros: revolving, pay only on what you draw. Cons: harder to qualify.
- •SBA pros: lowest cost. Cons: slowest, paperwork-heavy.
Realistic approval thresholds
- •$35,000+ in monthly deposits
- •6+ months operating (most lenders prefer 12+)
- •500+ FICO for revenue-based products / 600+ for term loans
- •Business bank account at a bank or credit union (not Square balance, not Cash App)
Common mistakes restaurant owners make
- •Stacking 3+ MCAs to cover MCA payments — death spiral
- •Using long-term financing for short-term needs (vice versa is also bad)
- •Skipping equipment financing and using working capital — leaves Section 179 deduction on the table
- •Applying during a slow month — wait for a strong 30 days first
Run the numbers
MCA / Factor Rate Calculator
Convert a factor rate offer to total cost, daily remit, and approximate APR. Useful for comparing MCA offers against term loan APRs.
Methodology
Total payback = principal × factor. APR-equivalent ≈ (factor − 1) × (365 / term days). This is an approximation — true APR is slightly higher because daily remittances reduce balance over time. APR is defined per the federal Truth in Lending Act (12 CFR § 1026, Regulation Z). MCAs are typically structured as a purchase of receivables and not subject to TILA APR disclosure, but several states (CA SB 1235, NY S5470) require commercial financing disclosures with an APR-equivalent.
Business Term Loan Calculator
Standard amortization: fixed APR, fixed weekly payment. Same formula banks and SBA lenders use.
Methodology
Standard amortization formula: P × r / (1 − (1 + r)−n), where r is the monthly rate (APR / 12) and n is the term in months. APR is the annual percentage rate as defined in the federal Truth in Lending Act (12 CFR § 1026.22). Actual lender quotes may include origination fees that increase APR.
Related questions
Yes — MCAs and working capital loans approve down to 500 FICO when monthly deposits are $35K+ and the business is 6+ months old.
Related guides
Best Business Loans for Retail Stores in 1970
Inventory financing, working capital lines, and MCAs for retail — including how to handle Q4 seasonality and slow-summer cash gaps.
MCA vs Term Loan: Which is Right for Your Business in 1970?
Side-by-side comparison of merchant cash advances and business term loans — speed, true cost, qualification, repayment structure, and which fits your situation.
Business Loan Rates Explained (1970)
APR, factor rate, and total cost of capital — what the numbers actually mean and how to compare offers across products.
Sources & references
- Current Employment Statistics (CES)— U.S. Bureau of Labor Statistics
- County Business Patterns— U.S. Census Bureau
- SBA 7(a) and 504 Loan Program data— U.S. Small Business Administration
- Bank Prime Loan Rate (DPRIME)— FRED · Federal Reserve Bank of St. Louis
- Small Business Credit Survey— Federal Reserve Banks