Restaurant Financing Options:
One of the most popular loans for small businesses and new locations is the SBA 7(a) loan. The SBA 7(a) is a commercial loan and is meant to help small businesses with expenses like real estate, working capital, or equipment. Like all loan programs, there are requisites that restaurants must meet to be considered eligible.
Businesses in the U.S. that are looking for funding can get the SBA 7(a) loan from a bank, credit union, or other lending institution, and the government guarantees the money up to a certain amount.
The SBA 7(a) isn’t the only option available to restaurant owners; here are a couple of others that might meet your requirements more closely:
SBA 504 Loan – Similar in execution to the SBA 7(a), the 504 loan is a larger loan that usually goes with a commercial loan from a bank or other lending institution. The maturity for real estate and land is also shorter for the 504.
SBA Express Loan – If you need a smaller amount of money than you would with the 504 or SBA 7(a), the Express loan is a good option. The 36-hour turnaround does come with a few drawbacks: higher maximum interest rates, lower SBA guarantees, and greater authority in the hands of the lender.
The straightforward requirements for the SBA 7(a) loan make it a great starting point to get funding for your restaurant. Plus, the low interest rates and relatively fast approval process make it a prime option for restaurant owners.
Once a loan is approved, we are experts in the most efficient way to allocate that capital and realize the largest return on your investment.
Versatility is a good attribute to seek in a loan program, and the SBA 7(a) is full of it. You can use the loan to buy an existing restaurant, replace or repair equipment, or even cover regular material expenses. Here’s a closer look at what you can use the SBA 7(a) for:
Equipment: This includes big, infrequent purchases like ovens, ranges, fryers, and freezers, as well as smaller, regular expenses like utensils, bar rags, and dish towels. Learn more about How Can You Use the SBA 7(a) Loan for Equipment
Land and real estate: Whether you’re renting space, buying a building, or planning new construction on vacant land, you can use the SBA 7(a) loan to help pay for the physical space your restaurant occupies.
Repairing existing capital: This could include new point-of-sale systems or software upgrades to existing ones, commercial vehicle repairs, or any other operating equipment that needs updating.
Development financing is the efforts of local communities to support and catalyze expansion through public and private investment in physical development, and/or business. Development finance requires programs and solutions to challenges that the local business, industry, real estate and environment creates.
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