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 (24-hour funding, revenue-based), working capital loans (3–24 months, $5K–$1M), and equipment financing for kitchen buildouts. SBA 7(a) loans offer the lowest 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 — 24-hour funding, $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) — lowest 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
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