2026 Complete Guide
4 ways to finance a restaurant: SBA 7(a), equipment financing, credit lines and term loans. Amounts, rates and timing for each.
Buying or refinancing the building? SBA 504, bank and CMBS options for the real estate itself are in our guide to restaurant property loans.
Restaurants financing
Each serves different restaurant needs
Best for: Buying property, major renovations $100K+, opening 2nd location
Best for: Ovens, coolers, POS systems, food trucks, emergency replacements
Best for: Seasonal cash flow, inventory, working capital gaps, ongoing needs
Best for: Renovations, multiple equipment, expansion, any business purpose
Side by side
| Loan type | Amount | Rate | Term | Approval |
|---|---|---|---|---|
| SBA 7(a) Loan | $50K-$5M | 8.5–11.5% APR | 10-25 years | 30–60 days |
| Equipment Financing | $5K-$500K | 6.5–20% APR | 1-7 years | 1-5 days |
| Line of Credit | $10K-$250K | 8.75–45% APR | Revolving | 3-14 days |
| Business Term Loan | $25K-$500K | 7.5–45% APR | 1-5 years | 3-14 days |
Typical ranges, updated September 2026. Your terms depend on your revenue, credit, time in business and the lender.
Worked example
Example: a buyer acquires an established restaurant business — equipment, lease and goodwill, not the building — for $800,000. Since October 1, 2026, SBA requires at least 10% of the total project as equity on an acquisition, and a seller note on full standby (no payments for the life of the SBA loan) can supply no more than half of it. Assumptions for illustration only: a 10-year SBA 7(a) loan at Prime 7.00% + 2.75%, computed with our SBA 7(a) calculator.
| Amount | |
|---|---|
| Purchase price | $800,000 |
| Equity injection (10%) | $80,000 — at least $40,000 in cash; up to $40,000 as a seller note on full standby |
| SBA 7(a) loan, 10 years, 9.75% | $720,000 — $9,415/mo |
| Annual debt service | $112,985 |
| Cash flow needed at 1.25x coverage | about $141,200 a year |
Under the October 2026 rules, lenders test that coverage on the restaurant’s historical cash flow, not the buyer’s projections — so the seller’s last two years of tax returns and P&L carry the deal. Adding back the seller’s own salary and one-time costs is normal; adding back expenses the business will keep paying is not.
Source: SBA SOP 50 10 8.1 (effective October 1, 2026) — equity injection and seller standby debt for changes of ownership.
FAQ
Common questions about restaurant financing
SBA 7(a) loans offer the lowest rates (8.5–11.5%) for established restaurants. Equipment financing funds urgent kitchen needs in 1–5 days. Lines of credit manage seasonal cash flow.
With an SBA 7(a) loan, at least 10% of the total project as equity — the rule for changes of ownership since October 1, 2026 — and a seller note on full standby can cover no more than half of that. On an $800,000 purchase that is $80,000, at least $40,000 of it cash. Lenders test the payment against the restaurant’s historical cash flow, about $141,200 a year at 1.25x coverage on a $720,000, 10-year loan.
Most restaurants doing $30K+/month qualify for $25K–$500K through alternative lenders. Revenue, credit score, and time in business are the primary factors lenders evaluate.
SBA loans need 680+, term loans 620+, lines of credit 650+, equipment financing 600+. Improving your score 6–12 months before applying can save you thousands in interest.
Equipment financing in 1–5 days. Lines of credit and term loans in 3–14 days. SBA loans take 30–90 days but offer the lowest rates. Waiting a few weeks for an SBA loan usually costs far less than a faster, high-cost option.
Yes. Equipment financing approves at 600+ using equipment as collateral. Focus on showing $15K+/month in revenue and clean bank statements. Avoid stacking multiple high-cost loans.
Most lenders require 3–6 months of business bank statements, a recent tax return, your business license, and a government-issued ID. SBA loans also need a business plan and 2 years of financials. Equipment loans often only need bank statements and an equipment invoice.
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