In the Restaurant Waiter Takes Order From a Diverse Group of Friends. Beautiful People Drink Wine and Have Good Time in this Stylish Place. Small Business Loan. Concept: How to get a business loan for your restaurant
By: omunoz
Read in 12 minutes

How to get a business loan for your restaurant

Managing a restaurant is not easy. For it to be successful, you have to offer top-notch customer service. Likewise, the menu should be good and varied enough to keep attracting diners. But something many restaurant owners might not know is that they even need to know how to get a business loan.

The food industry is a highly competitive one. In the spring of 2018, the number of restaurants in the United States reached more than 660,000, which means a lot of competition for new businesses. Despite that big, healthy number, in 2020, the industry took a bit hit courtesy of the COVID-19 pandemic.

The main concern of restaurant owners nowadays is how to get the capital to continue working and being competitive. Unfortunately, accessing funds is difficult for food businesses, as some lenders see the restaurant industry as volatile.

But you can innovate, recover and grow your business. In this article, we tell you how to get a business loan to open a restaurant or make the one you already thrive on.

The problems restaurants face

Restaurateurs are, no doubt, one of the most resilient types of businesses.

The food industry has many unique problems that many other business owners could never even imagine. Despite that, restaurateurs manage to overcome these difficulties (most often with the help of a loan).

Failure rate

Staying in business after the first year is probably the biggest challenge a restaurant has to overcome. About 60% of new restaurants in the United States fail during their first year. And almost 80%t close before reaching its fifth anniversary.

Some of the reasons for these businesses going bankrupt are:

  • The lack of financing
  • A bad location
  • Having inefficient employees
  • Having problems with the menu

Of these factors, the lack of qualified employees is one of the biggest challenges for these food businesses.

The coronavirus pandemic

COVID dealt a very hard blow to restaurants all throughout the country: quarantines and stay-at-home orders forced them to close, making the industry suffer a 100% drop in visits in March of 2020. But this was not going to stop restaurant owners.

With their incredible resilience, restaurateurs found ways to innovate so they could keep their businesses open. Among some of the solutions they found to continue operating safely are:

  • home delivery service
  • use of food delivery apps
  • curbside delivery

Many businesses had to access loans to implement these innovations (and be able to pay their employees’ payroll). But thanks to these ideas and external capital, many restaurants managed to start recovering little by little.

Stack of dollars. Paper bills or money. Icon in a flat style with shadow. Vector, illustration EPS10. concept: restaurant, how to get a business loan

How can a loan help your restaurant? Innovation and recovery

Another problem for restaurant owners, perhaps the most pressing one, is the lack of capital. Many restaurant owners underestimate the amount of money they need to manage their businesses.

If you are thinking about opening a restaurant, you have to know that most of these businesses do not get good profits during their first months. This means that you can not rely solely on your cash flow to operate.

Even for established business owners, financial challenges arise during recessions or low seasons when they have fewer clients. Lower incomes imply difficulties in covering expenses such as leasing, purchasing supplies, or paying payroll.

But loans are just the tools that can help new and seasoned restaurants stay strong, recover, and innovate to achieve success. A loan can help you invest in a restaurant makeover, in your employees, in your food, or simply to help your economy.

Happy young restaurant owner standing at kitchen counter looking away and smiling. Caucasian businessman in commercial kitchen. concept: restaurant, how to get a business loan

How to use a business loan in your restaurant

To face these problems, you have to learn how to get a business loan and use it. These are just some of them:

  • Employees

As the industry continues to grow, the demand for workers also increases, and therefore finding people with the necessary skills gets more and more complicated.

You also need to consider the high payroll costs, which are increased by adding new employees.

With a loan, you will not only be able to hire the employees that your restaurant needs, but you can also give your team the necessary training to offer excellent customer service.

Well-trained workers feel more satisfied, do a better job, and are more efficient. Similarly, ongoing training generates loyalty and decreases employee turnover.

  • Promote your restaurant

Defining your brand’s message, spreading it, and getting loyal customers are essential steps for business growth. They’re also the main objectives of any marketing strategy.

With the funds provided by a loan, you can create social media campaigns or organize special events to promote your business. Don’t forget to make sure that your strategy is unique and that it shows what makes your restaurant different from others.

  • Buy kitchen equipment and vehicles

If you have a restaurant, you know how expensive it can be to replace industrial ovens or stoves. With a business loan, you can update these and other equipment and acquire the most modern available in the market.

In the same way, if you plan to expand your restaurant and reach many places outside of your physical restaurant, you can offer additional services, such as catering. With the money from the credit, you can buy a food truck or vehicles to transport food.

  • Makeover your restaurant

You can renew your restaurant by investing the loan money to completely change the concept, remodel some areas, or update them with the latest interior design trends. Or simply change the paint and modernize the electrical and gas networks.

  • Get work capital

With a business loan, you can ensure sufficient funds to keep your business running. Working capital is essential to cover the business’s daily expenses, especially during peak seasons, when there’s more money going out than entering.

Now that you know how you can invest the money from a loan, it’s time that you know how to get a business loan for your restaurant.

Cute young female cook selling hot dogs to a couple of customers in a food stand. concept: restaurant, how to get a business loan

How to get a restaurant business loan

Some alternative lenders can help you obtain the financing your restaurant needs to grow.

At Camino Financial, we have the loan that best fits your needs. Requesting it is very easy; you just have to follow some simple steps:

1. Fill a brief online application about your business

This will let you know if you qualify for a loan.

2. One of our business loan specialists will contact you

We want to learn more about your restaurant. We will explain all the financing options that we offer during this process, and we will answer all your questions.

3. Send us your financial records through our online platform

With this information, we will make sure to find the best financial solution for your company.

4. After reviewing your application, our team will send you a final offer

After signing the final offer with the loan terms, you will receive the funds in your bank account in just two days.

As you can see, the process of applying for a loan is quite simple. In the same way, the requirements that you must fill in are very simple:

  • To qualify for a Camino Financial loan, your business must have been operating for at least 9 months.
  • Your restaurant should generate sales of $30,000 per year.
  • We do not require a minimum FICO credit score.

Remember that our requirements are much more flexible than those of a bank. To grant a loan, we rely solely on your business’s cash flow and the way you intend to invest the money. 

We offer our clients the best interest rates and the most convenient terms in the market.

Other alternatives

If you want to go directly to a bank, you keep in mind that these lenders are quite demanding at the time of granting their loans. To begin with, you need a high credit score to increase your chances.

Another requirement has to do with the collateral; on some occasions, you will have to offer your personal assets.

As if this was not enough, it is well known that these loans can take up to six months, or even more, to be approved.

The SBA is another alternative; however, the application process takes a long time, and it takes between 45 to 120 days for the funds to be available.

Female Owner Of Start Up Coffee Shop Or Restaurant Turning Round Open Sign On Door. concept: restaurant, how to get a business loan

Your restaurant can be successful!

If we give credit to the statistics, the restaurant industry seems to be complex, but it can also bring you a lot of joy. Every day, more restaurants open their doors, hoping to conquer the market and can succeed. And for many, survival depends largely on a loan.

For this reason, restaurant owners need to know how to get a business loan and the know-how to invest it well. You could open a new restaurant, remodel the current one, hire more employees, buy equipment or improve your working capital.

But it is important to select the right lender.

You need some that will guide you through the entire process, explain your financing options, the terms of the loan, and how the payments will impact your earnings.

That’s what Celso did.

This restaurant owner needed a loan to renovate and expand his restaurant and make it more attractive. After finding Camino Financial, he got the financing he needed and was able to hire 4 new employees, renovated his location, created a dance floor, improved his sales by 7%, and increased his credit score by 100 points.

Celso is now a role model in his community.

At Camino Financial, you can easily access a loan. Apply today and get ready to have the cash you need to make your restaurant successful and prove the statistics wrong!

Apply for a Camino business loan!



Check if you
qualify for a loan