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Business loans for restaurants

When done right, hospitality businesses take off and bring in consistent clients and revenue. Restaurants are perfect examples.

People love memorable dining experiences; admit it or not, it’s one of the firsts that we go back to as soon as the pandemic restrictions eased.

The thing is, starting or continuing a restaurant business is not an easy feat. There are tons of restaurant financing matters to attend to as a business owner.

But don’t lose hope; it’s why restaurant business loans are here!

What exactly is a restaurant business loan?

It’s essentially a type of business loan specifically for restaurants. The process is similar to any other loan starting with the loan application process, receiving the loan amount, and paying it off with the interest rates after a prescribed period.

The first place you’ll turn to is probably the traditional banks. And while they do offer restaurant loans, the process is tedious and strict since not all restaurant businesses see returns.

Thankfully, there are now various sources and types of restaurant business loans you can turn to. Let’s discuss them!

Types of restaurant loans

Here are some of the most common times of loans for restaurants. Determine which ones suit you best.

Small business loan

Several lenders, like Lumi, now grant small business funding, short-term loans, and other types of small business loans without all the fuss.

People prefer these because of the easy loan process and fast-approved flexible loans.

You don’t need to have a steady cash flow, monthly revenue, or a good standing immediately as a start-up.

These lenders can grant you a restaurant loan faster.

A bad credit score won’t void your application process but expect stricter and shorter terms or higher interest rates. Learn more about the different loans Lumi offers here.

Business line of credit

It’s not only the start-ups who need help with restaurant funding. You can also borrow loan amounts for operational costs such as restocking, equipment financing, or employee salaries.

You’ll be given a business credit. The lender determines your limit based on your background, current standing, and risk.

This type of restaurant financing is beneficial for establishments that don’t have stable monthly revenue or are seasonal small businesses.

Merchant cash advances

If you and your business partner encounter an emergency, a merchant cash advance will be a quick solution.

As the name suggests, they give you a sum in advance which you’ll repay with your future sales or income.

How to apply for a restaurant loan? General guidelines

The specifics will vary on each lender’s protocols and guidelines. But we’ll discuss the tips you need at Lumi to help you prepare.

  • Go through the application process and fill out the necessary information.
  • Wait for the approval and let Lumi choose the perfect package for you.
  • Repay the amount in the prescribed time

Easy, right?

It helps to choose lenders who understand what it’s like to run SMEs, making the process a lot quicker with less hassle.

What are restaurant loans for?

So, you get the money from the loan. Where should you correctly allot these funds?

Well, it’s entirely up to your bookkeeping. What areas need your help? But for an idea, here are some of the common uses:

  • Equipment maintenance or buying a new one
  • Advertisement expenses
  • Employee salary
  • Rent and utilities
  • Bouncing back from a crisis (i.e., a pandemic)
  • Decorations and fixtures
  • Inventory expenses
  • Investments on behalf of the business

Helpful tips to get started

For a start-up or a first-time borrower, the entire process can be intimidating. There are a lot of technicalities to grasp, and lender options are everywhere!

We hope these tips can help you be less overwhelmed and jumpstart your journey to becoming a successful restauranteur.

Prepare important documents

All lenders will likely require the standard requirements such as financial documents, valid I.D.s, banking history, credit score, monthly revenue, business plan, proof of residence, etc.

Before you go “shopping” for a lender, have at least these documents ready, so you only have to supply additional requests and not start from scratch.

Trust us; it will save you from headaches and stress!

Know what you need

It’s okay if you don’t have everything sorted out. But at least have your priorities set straight and know what your business needs.

Having a clear vision of your needs and capabilities will make it easier for you and the lender to arrive at workable loan packages.

Consult an adviser

If you’re still clueless even after reading up on blogs and articles, don’t hesitate to approach an Australia-based loan specialist for advice.

It’s a small price to pay to save you from more complications in the future.

Frequently asked questions

Let’s address some of the FAQs on this topic!

Is it hard to get a loan for restaurants?

We’ll be honest; yes, it can get challenging. Imagine how many aspiring restaurant owners there are. Additionally, the industry is unpredictable and volatile.

You’re facing competition and proving that you will get returns for your risk that is a challenge.

However, not impossible.

With so many lenders available, you’re bound to find a compatible financer.

Are business plans really needed when applying for loans?

A business plan helps the lender see your visions for the restaurant.

It shows the projected revenue, strategies, and what’s ahead. With this information, they can choose the right package and terms for you.

Some lenders may or may not require it, but it will surely help with the process.

Plus, a business plan is generally a good idea in establishing a business whether or not you’re looking to loan.

How much can I borrow from lenders?

Again, the specifics will depend on the lenders. Some allow higher amounts, while some set limits depending on your application outcome.

But to give you an idea, business loans lenders can help you get from $5,000 to $1,000,000.


It’s not as intimidating as it sounds, right?

Loans are standard for businesses, especially start-ups. With compatible lenders, you don’t have to worry too much.

You can achieve your restaurant dreams in no time.

Why don’t you use our free calculator to get started?

Post Author: Danielle Sassine

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