Restaurant Financing: Buildout, Equipment, and Working Capital
Restaurant lending is a separate underwriting world. Most banks decline the entire category. The lenders who fund restaurants do so with structures built around POS data, daily card volume, and equipment collateral — not tax returns.
SBA 7(a) for buildout
Best long-term capital for restaurant openings or expansions. 10% equity, 10-year term on working capital, 25-year on real estate. Buildout costs, equipment, opening payroll, and 6 months of operating reserves all qualify as use of funds.
Equipment financing for kitchen
Hoods, walk-ins, refrigeration, line equipment — all standard equipment finance. 60-month terms, 8–14% APR, 0–10% down. Section 179 makes a strong year-one tax case.
MCA against card processing
Daily card volume is collateral. Funds in 24–48 hours, $20K–$500K. Use only for short-term needs (under 6 months) — daily debits + thin margins is a brutal combo at longer terms.
Revenue-based financing
Better fit than MCA for most restaurants. Monthly remit (not daily) flexes with revenue. Pricing 1.25–1.4x over 12–18 months.
Avoid
Stacked MCAs (do not take a 2nd or 3rd MCA — refi to a term loan instead). 6-month bank LOCs sold as 'inventory financing' — actually personal credit cards in disguise at 24%+ APR.
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