Restaurant financing: options, costs and how to qualify
Most restaurant needs fit a line of credit, equipment financing or an SBA loan; a merchant cash advance is the fastest option and usually the most expensive, so compare its total payback first.
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Restaurants live on daily card sales, thin margins and seasons. That shapes which funding fits. A short dip calls for something you can draw and repay. A new oven calls for financing tied to the oven. A buildout calls for a longer term.
Steady card sales are exactly what a merchant cash advance buys a share of, so expect to be offered one. Read how an MCA works before you accept one.
A worked example for restaurants
A slow-season gap: $30,000 over 9 months
Merchant cash advance at a 1.35 factor rate$10,500 in cost
Bank loan at 10.98% APR, for owners who qualify$1,389 in cost
Example numbers, not an offer. The loan assumes equal monthly payments. Rates you are offered depend on your business. Price your own offers
What you need the money for, and what fits
- Slow season or a slow monthDraw only what you need, repay when sales return.Best fit: Line of credit
- Kitchen equipmentThe equipment secures the financing, and the term can match its life.Best fit: Equipment financing
- Renovation or second locationA larger amount over a longer term. SBA 7(a) loans go up to $5 million.Best fit: SBA loan
- Buying your buildingSBA 504 loans offer long-term, fixed rate financing up to $5.5 million for major fixed assets.Best fit: SBA 504
- Payroll before a busy weekendA one-time amount repaid on a schedule you can plan around.Best fit: Term loan
- Cash in days, steady card salesFast, but costly. Check the total payback and reconciliation terms.Best fit: Merchant cash advance
Your card processing costs, too
Card fees come out of every check. Your effective rate, total fees divided by card sales, is the number to know. Our statement guide shows how to find it.
Thinking of a surcharge? Visa allows surcharges on credit cards only, never debit. In New Jersey, a surcharge may not exceed your actual cost to process the card, and restaurants must post it on a sign in the customer service area and on the menu (P.L.2023, c.146). Check your state on our surcharge law table.
What to watch for
Daily debits on slow days. A cash advance collected by a fixed daily debit takes the same amount on a rainy Tuesday as on a full Saturday. If your contract has reconciliation, use it when sales drop.
Stacking. A second advance to cover the first one's debit adds a second debit. See MCA stacking.
Equipment leases inside processing contracts. Read whether the card terminal is bought or leased, and whether the lease can be canceled.
Four steps to funding
- 1
Answer a few questions
What you need, how much and how soon. Your industry is already filled in. No contact details to see options.
- 2
See your best-fit options
Two to four products that match, with typical cost ranges in dollars.
- 3
Get offers, if you want
Your request goes only to our own funding service, never to a call list.
- 4
Read the agreement, then decide
The funder is named in your agreement. Sign only if the numbers work.
Frequently asked questions
Sources
- SBA, 7(a) loans (maximum $5 million), accessed Oct 20, 2026
- SBA, 504 loans (maximum $5.5 million), accessed Oct 20, 2026
- SBA, Microloans (up to $50,000), accessed Oct 20, 2026
- 12 CFR 235.3, Regulation II debit interchange cap (eCFR), accessed Oct 20, 2026
- Visa, Surcharging credit cards: Q&A for merchants, accessed Oct 20, 2026
- New Jersey P.L.2023, c.146, credit card surcharges, accessed Oct 20, 2026
- Connecticut General Statutes 42-133ff (Chapter 739), accessed Oct 20, 2026
- Massachusetts General Laws c.140D, s.28A, accessed Oct 20, 2026