Best Restaurant Business Loans Explained
Of the seven restaurant business loan types outlined above, you’ll need to decide which loan is right for you. Here we’ll explain the features of each of these loans in detail to make your choice easier.
Fora Financial offers flexible short-term loans between $5,000 and $500,000 with low rates that are easy to apply for. Until now, Fora Financial has supplied more than $2 billion in working capital solutions to their customers. Over 25,000 unique customers have leaned on Fora to achieve their goals and build their businesses.
As one of the most reliable small business lenders, Fora Financial comes highly recommended by us. They specialize in helping small businesses and loan applications are handled swiftly.
The company aims to continue being a competitive lender with extensive and flexible offerings. They are dedicated to developing fresh ways to serve small businesses for as long as possible in a financial market that’s always changing. Read more in the full Fora Financial review.
Created in 1953, the Small Business Administration helps entrepreneurs secure funding and supports the interest of small businesses. SBA restaurant business loans cover expenses like start-up costs, expansion, equipment, working capital, inventory, and real estate. Unfortunately, limited loan amounts, a lengthy approval process, and bad credit can deter borrowers.
Ranked the #1 SBA lender, we recommend Live Oak Bank, which specializes in small business loans. Their online application process eases uploading documentation and monitoring loan progress.
Merchant cash advances are lump sum payments available to borrowers using future credit/debit card sales as repayment. Fast cash with no collateral upfront doesn’t require good credit; however, high interest rates and daily minimum payments can disrupt cash flow. Requiring only three months in business and a minimum personal credit score of 550, Rapid Finance is our choice for merchant cash advances with funds of up to $500,000 available in 24 hours. Read more in the full Rapid Finance review.
Fifty percent of all business owners experience cash flow issues. A business line of credit can provide flexible access to capital for recurring expenses and seasonal business flow. Like a credit card, with a spending limit and monthly or yearly payments, this revolving line of credit allows you to borrow the minimum amount you need while only paying interest on that amount. A secured credit line requires collateral, but the payoffs may include a considerable loan amount and a lower interest rate.
Unsecured credit lines may be more expensive due to more lender risk, but no collateral is required. Wells Fargo takes the top spot here as a national bank with extensive experience lending to startups and young businesses with some of the lowest interest rates on the market.
With over six million crowdfunding campaigns last year and $17.2 billion generated in North America alone, this industry is expected to grow by at least 14% next year. Creating and maintaining a social media presence helps reach a vast audience. Business owners present their ideas or products in exchange for benefits such as free meals, invitations to the opening, or monthly reservations. With no credit checks, collateral, or financials required, campaigns take 11 days to prepare and run for nine months.
The crowdfunding experience can be time-consuming with no guarantees of reaching your funding goals. This growing market could reach $300 billion by 2030, so the time and effort may be worth it.
Referred to as accounts receivable financing, restaurant owners get a capital advance in exchange for unpaid invoices. Invoice factoring involves selling your outstanding invoices to an invoice factoring company at a discount, while invoice financing requires paying off the advanced capital on unpaid invoices with interest. Lenders finance 85% of the total invoice and the final 15% upon full payment. These loans are easier to get, and freeing up your cash flow is always a win-win situation.
We recommend BlueVine, which will fund up to $1 million to borrowers with a 530 credit score, who have been in business for at least three months, and show an annual revenue of $120,000. Read more in the full BlueVine review.