Tap to get financing
SBA 7(a) Loans
SBA 7(a) Loans
Uses for the SBA 7(a) LoanCompare SBA LoansFund a StartupBuy EquipmentGet a Commercial MortgageRepair CapitalRefinance Business DebtGet a Working Capital LoanBuy a BusinessLearn About the SBA Lending ProcessFind an SBA Lender
Requirements Rates Loan Calculator
SBA Tools
SBA 7(a) Loan CalculatorSBA 504 Loan Calculator
Blog
About Us
About usContact us
Get financing
Close sba7a.loans is an independently owned and operated website and has no government affiliation. We are not the Small Business Administration and are not a lender. If you are trying to reach the SBA click here to be redirected.
Newly Published
Oct 27 at SBA 7(a) Loans
Small Business Loans Guide: Before You Start
Aug 26 at SBA 7(a) Loans
Who Are Specialized Lenders in the SBA 7(a) Loan Program?
Aug 26 at SBA 7(a) Loans
Writing a Proposal for the SBA 7(a) Loan
Explore the Janover Network
Mar 20 at Multifamily Loans
Multifamily Minute Reader Reflections: How Will Bank Failures Impact Multifamily?
Mar 17 at Commercial Real Estate Loans
Top 10 Commercial Real Estate Lenders of 2023
Mar 15 at Commercial Real Estate Loans
Top 4 Refinancing Loans for Industrial Real Estate in 2023
Was This Article Helpful?
Small Business and SBA Lending Blog
Last updated on Feb 19, 2023
7 min read

How to Get an SBA Loan for a Restaurant

Most banks consider restaurants to be a high-risk industry, meaning that they are far less likely to approve loans for restaurant owners. So, how do you get the funding you need?

Better Financing Starts with More Options Start Your Application and Unlock the Power of Choice. Click Here to Get Quotes →$1.2M offered by a Bank at 6.0%$2M offered by an Agency at 5.6%$1M offered by a Credit Union at 5.1%Click Here to Get Quotes
In this article:
  1. Restaurant Financing Options
  2. Using the SBA 7(a) Loan for Your Restaurant
  3. SBA 7(a) Loan Rates
  4. How to Get an SBA 7(a) Loan for a Restaurant
  5. Who Offers SBA 7(a) Loans to Restaurants?
  6. What Are the Eligibility Requirements?
  7. More Information on the SBA 7a Loan
  8. Using an SBA 7(a) Loan for Start-Ups
  9. Finding an SBA 7(a) Lender
  10. How to Qualify and Apply for an SBA 7(a) Loan
  11. SBA 7(a) Loan Terms
  12. Want Personalized Guidance?
  13. Related Questions
  14. Get Financing

Most banks consider restaurants to be a high-risk industry, meaning that they are far less likely to approve loans for restaurant owners. The bank’s view of risk isn’t misplaced—a 2017 study by Restaurant Startup & Growth magazine concluded that 23% of restaurant start-ups will fail within the first year.

If you can’t get a traditional loan, what other financing options are there? Is there another loan option to start a restaurant or to buy an existing restaurant? We’ve answered those questions for you here, as well as questions about eligibility, finding a lender, and even rates for specific loans.

First, let’s talk about your options.

Restaurant Financing Options

One of the most popular loans for restaurateurs 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.

Restaurants 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.

Using the SBA 7(a) Loan for Your Restaurant

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.

  • Refinancing debt. If it’s beneficial for your business to refinance existing debt, an SBA 7(a) loan may be able to help save you some money.

  • Buying a business. You can use an SBA 7(a) loan to buy or expand an existing restaurant.

SBA 7(a) Loan Rates

Loan rates for the SBA 7(a) depend on the loan size, the individual borrower, and the lender. Certain terms, like maturity, have a standard maximum or minimum. Take a look at the following chart for specifics of the SBA 7(a) loan rates.

Loan Amount

Minimum

No minimum

Maximum

$5 million

Maturity

Real estate loans

25 years

Equipment

10 years

Working capital or inventory

10 years

Other

No more than 25 years

Interest Rates (Maturity Less Than 7 Years)

$25,000 or less

Base rate plus 4.25%

$25,000–$50,000

Base rate plus 3.25%

More than $50,000

Base rate plus 2.2%

Interest Rates (Maturity More Than 7 Years)

$25,000 or less

Base rate plus 4.75%

$25,000–$50,000

Base rate plus 3.25%

How to Get an SBA 7(a) Loan for a Restaurant

The SBA 7(a) may be the right choice for your restaurant—the eligibility requirements are straightforward, and finding a lender can be a streamlined process. Even if you have bad credit, you may still qualify for an SBA 7(a) loan.

Learn More: How Do I Get an SBA 7(a) Loan with Bad Credit?

Who Offers SBA 7(a) Loans to Restaurants?

Banks, credit unions, savings and loan companies, and specialized lenders can all operate as SBA 7(a) lenders. Some lenders are considered SBA Preferred Lenders, which means they have a reputation for helping business owners get the loan they need in a timely and efficient manner.

What Are the Eligibility Requirements?

  • A restaurateur must have reasonable equity to invest, like an already-profitable business. If that’s not you, don’t worry: you can offer other equity (like personal property) as collateral.

  • SBA lenders also require that you’ve sought alternative financial resources before applying for an SBA 7(a) loan. If you have a savings account or are able to get a personal loan, it’s usually required that you pursue these options first.

  • The owner of the business cannot be on parole.

  • The business must be operating in the U.S. or one of its territories.

  • Only for-profit businesses are eligible for the SBA 7(a), which applies to most restaurants.

  • Individual lenders have some say in the lending process, and one point of control is with borrower credit scores. Most lenders require the owner’s personal credit score to be at least 600, but exact requirements will vary depending on your experience in the industry and your relationship with your lender.

More Information on the SBA 7a Loan

The SBA 7(a) is a versatile loan that’s designed to get you the capital needed for your small business. If you’ve been looking for a way to fund your restaurant, consider this kind of loan.

Using an SBA 7(a) Loan for Start-Ups

The most common loan guaranteed through the SBA for start-up companies is the SBA 7(a). This loan can be used for real estate, office space, equipment costs, or even working capital; if the expense is for a legitimate business purpose, it’s probably allowed by the loan program. For more information about how the SBA 7(a) loan can be used for start-ups, see our page on the subject.

Finding an SBA 7(a) Lender

Though the SBA shares a wealth of valuable information on starting and growing your small business, it isn’t in the business of lending money. The SBA 7(a) loan is offered through banks, credit unions, and other lending institutions, and the SBA guarantees the loan up to a certain amount.

Certain banks are considered SBA Preferred Lenders, and have proven track records of providing small businesses with SBA-backed loans. There are other factors that could improve your chances when speaking with a lender.

How to Qualify and Apply for an SBA 7(a) Loan

Good bookkeeping, understanding your creditworthiness, and a solid business plan can all help you when applying for your loan. But, as with any loan, a borrower must meet certain standards to qualify:

  • Your restaurant must operate for profit.

  • You must have reasonable equity to invest—this could mean that you already have a profitable restaurant, or you could invest your own personal equity like real estate.

  • The owner cannot be on parole.

  • You must be doing business in the U.S. or its territories.

  • You must have first used other financial resources. So, if you have savings accounts or are able to get a personal loan, you’re usually required to try these methods before you can qualify for an SBA 7(a) loan.

For more details on how to apply for an SBA 7(a) loan, and information on eligibility, check out our qualification page.

SBA 7(a) Loan Terms

Terms for real estate and land loans run up to 25 years. The maximum loan amount is $5 million, and there’s no minimum loan amount. The SBA guarantees up to 85% for loans of up to $150,000. For loans greater than $150,000, the SBA guarantees 75%. For more details about interest rates, fees, and other terms, head over to our Loan Terms page.

Want Personalized Guidance?

At SBA7a.Loans, we live and breathe the SBA 7(a) loan process. We match business owners like you with the best lender for your situation, even if it means that we have to look outside of the SBA 7(a) platform. We serve our customers by 1) offering a free educational portal, and 2) leveraging our lender-matching service to help you on your way to success. We have a deep love of American small businesses, and we believe it shows in our customer-first attitude.

To learn more about the SBA 7(a) loan program or to get a free quote, simply click the button below!

Related Questions

What are the requirements for an SBA loan for a restaurant?

To get an SBA 7(a) loan for a restaurant, you must have reasonable equity to invest, like an already-profitable business. If that’s not you, you can offer other equity (like personal property) as collateral. You must have sought alternative financial resources before applying for the loan. The owner of the business cannot be on parole, the business must be operating in the U.S. or one of its territories, and it must be a for-profit business. Most lenders require the owner’s personal credit score to be at least 600, but exact requirements will vary depending on your experience in the industry and your relationship with your lender.

Certain banks are considered SBA Preferred Lenders, and have proven track records of providing small businesses with SBA-backed loans. There are other factors that could improve your chances when speaking with a lender.

What types of SBA loans are available for restaurants?

The Small Business Administration (SBA) offers two types of loans for restaurants: SBA 7(a) loans and SBA 504 loans.

SBA 7(a) loans are the most popular type of SBA loan and are available for up to $5 million. They are best for larger, more established restaurants who need lower-cost commercial real estate financing.

SBA 504 loans are available for up to $5.5 million and are best for businesses who want to purchase property, buy equipment, and get working capital for their business.

In addition, SBA Express loans are a great choice for many restaurants who need $50,000 or less and have less-than-stellar credit.

How long does it take to get an SBA loan for a restaurant?

The SBA 7(a) loan is a great option for restaurant owners because of its straightforward requirements and relatively fast approval process. The turnaround time for the SBA 7(a) loan is typically 2-3 weeks, depending on the lender. The SBA Express loan is another option that has a 36-hour turnaround, but it comes with higher maximum interest rates, lower SBA guarantees, and greater authority in the hands of the lender.

For more details about interest rates, fees, and other terms, head over to our Loan Terms page.

What documents are needed to apply for an SBA loan for a restaurant?

To apply for an SBA loan for a restaurant, you will need to provide the following documents:

  • SBA Form 1919 (borrower information form)
  • SBA Form 912 (statement of personal history)
  • SBA Form 413 (personal financial statement)
  • Financial statements, including a balance sheet, profit and loss, and income projection
  • Agreement to purchase the business
  • Letter of intent to buy the business
  • Business tax returns for the past three years
  • Any outstanding business debt
  • Long-term business contracts
  • Documentation of business assets
  • Business lease agreement
  • Incorporation documents and/or business license
  • Business plan

In addition, the SBA will usually order an independent business appraisal to give lenders an idea of what the true value of the business is.

The SBA allows applicants to get help (for example, from a lawyer or a translator) filling out the application paperwork, but your lender will be required to submit information about who gave you help to the SBA, so you’ll need to document who this person is as well.

What are the advantages of an SBA loan for a restaurant?

The SBA 7a and SBA 504 loan programs are great ways to finance a restaurant business. They offer a variety of benefits, such as:

  • Purchase property
  • Buy equipment
  • Get working capital
  • Potential for lower interest rates
  • Longer repayment terms
  • No collateral required for some loans

Additionally, certain banks are considered SBA Preferred Lenders, and have proven track records of providing small businesses with SBA-backed loans. There are other factors that could improve your chances when speaking with a lender.

For more information, please visit www.sba7a.loans/sba-7a-loans-small-business-blog/sba-7a-loan-for-a-restaurant and www.commercialrealestate.loans/restaurant-loans.

In this article:
  1. Restaurant Financing Options
  2. Using the SBA 7(a) Loan for Your Restaurant
  3. SBA 7(a) Loan Rates
  4. How to Get an SBA 7(a) Loan for a Restaurant
  5. Who Offers SBA 7(a) Loans to Restaurants?
  6. What Are the Eligibility Requirements?
  7. More Information on the SBA 7a Loan
  8. Using an SBA 7(a) Loan for Start-Ups
  9. Finding an SBA 7(a) Lender
  10. How to Qualify and Apply for an SBA 7(a) Loan
  11. SBA 7(a) Loan Terms
  12. Want Personalized Guidance?
  13. Related questions
  14. Get Financing

Getting a small business loan should be easy.⁠ Now it is.

Click below for a free, no obligation quote and to learn more about your loan options.

Get financing →
Janover logo

SBA 7(a) Loans is a Janover company. Please visit some of our family of sites at: Multifamily Loans, Multifamily Today, Commercial Real Estate Loans, SBA7a Loans, CMBS Loans, Apartment Loans, HUD Loans, HUD 221d4 Loan, HUD 232 Loan, HUD 223f Loan, HUD 223a7 Loan, SBA Express Loans, SBA 504 Loans, and OpportunityZones Help.

Janover Inc.

6401 Congress Ave
Ste 250
Boca Raton FL 33487

hello@sba7a.loans

SBA 7(a) Loans

SBA Loan Comparison
SBA 7(a) Loan Fees, Rates, and Terms
Qualifying for an SBA 7(a) Loan
SBA Loan Guides per State

Site Information

Privacy Policy
Terms of Use
Advertiser Disclosure

This website is owned by a private company that offers business advice, information and other services related to multifamily, commercial real estate, and business financing. We are a technology company that uses software and experience to bring lenders and borrowers together.

All users should perform their own due diligence and research. Nothing on this website is an offer or a solicitation for a loan. This website does not endorse or charge you for any service or product. None of the information on this site constitutes legal advice. We are not affiliated with the Small Business Administration (SBA). If you need to visit the SBA directly please click here: sba.gov

Click here for our Advertiser Disclosure.

Copyright © 2022 Janover Inc. All rights reserved.