Restaurant Business Loans

Secure Your Restaurant’s Future with 1West’s Business Loans

---

What is a Restaurant Business Loan?

Restaurant loans are specially designed for restaurant businesses. It basically provides restaurant owners (or aspiring ones) with the money they need to build or grow their venture.

---

---

Types of Restaurant Business Loans at 1West

As mentioned above, traditional lenders don’t often make it easy for restaurants to get approved for a loan. Even if you secure financing from banks, it will take weeks or months before the funds are deposited into your account.

Fortunately, qualifying for a loan from 1West is quick and easy, and we have several options in store for you.

Unsecured Working Capital

An unsecured working capital loan is one of the best options for restaurateurs with good credit ratings. These loans require no collateral, so the lender generally takes on more risk than secured business loans. This is an excellent option for business owners without valuable assets but who have a good credit rating.

Interest Rate	18%
Term Length	2 to 24 months
Loan Amount	$5,000 to $1,000,000
Processing Time	48 hours

Pros

• Quick access to cash for immediate needs like paying bills or restocking inventory.
• No collateral required, reducing risk for restaurant owners who may not have valuable assets to pledge.
• Flexibility in how funds are used, allowing for agility in responding to changing business conditions.

Cons

• Higher interest rates compared to secured loans due to increased risk for lenders.
• Lower borrowing limits than secured loans, limiting the amount of capital available.
• Shorter repayment terms may lead to higher monthly payments, impacting cash flow in the long run.

Real Estate Financing

Restaurants can secure loans to purchase or renovate property, providing stability and potential for growth by owning their space rather than leasing, reducing long-term costs and allowing for customization to fit their needs.

Interest Rate	6%
Term Length	6 to 60 months
Loan Amount	$100,000 to $20,000,000
Processing Time	2 to 3 weeks

Pros

• Ownership of property provides stability and potential for long-term appreciation.
• Tax benefits like mortgage interest deductions can reduce overall operating costs.
• Customization options allow restaurants to create a space tailored to their brand and operational needs.

Cons

• Requires a significant upfront investment for down payment and closing costs.
• Long-term commitment to a property may limit flexibility for future expansion or relocation.
• Market fluctuations can impact property value and affect the restaurant’s financial stability.

SBA Loans

An SBA loan offers low-interest rates and longer repayment terms, making them ideal for restaurant startups or expansions. Backed by the Small Business Administration, they provide access to larger sums of money for various needs, from equipment purchases to working capital.

Interest Rate	5.75%
Term Length	10 to 25 years
Loan Amount	$30,000 to $5,000,000
Processing Time	1 month

Pros

• Lower interest rates and longer repayment terms compared to conventional loans.
• Government backing reduces risk for lenders, making it easier for restaurant owners to qualify.
• Higher borrowing limits than other loan options, providing access to substantial capital for various needs.

Cons

• Lengthy application process and strict eligibility requirements may delay funding.
• Collateral may still be required for larger loan amounts, posing a risk to restaurant owners.
• Additional fees and paperwork associated with SBA loans can increase overall borrowing costs.

Accounts Receivable Financing

Restaurants can leverage their unpaid invoices to access immediate cash flow, helping cover expenses during slow periods or invest in growth opportunities without waiting for customer payments. Accounts Receivable financing also don’t come with interest, hidden, or any other additional fees, making it a better option than a merchant cash advance.

Interest Rate	5%
Term Length	none
Loan Amount	$10,000 to $10,000,000
Processing Time	2 weeks

Pros

• Provides immediate access to cash flow by leveraging unpaid invoices.
• Helps restaurants manage cash flow during slow periods or when waiting for customer payments.
• No additional fees unlike merchant cash advances.

Cons

• Higher fees and interest rates compared to traditional loans, reducing overall profitability.
• Risk of customer defaults or late payments can impact cash flow and increase financial risk.
• Limited to businesses with consistent invoicing practices and reliable customers.

Lines of Credit

Providing flexible access to funds, a business line of credit allows restaurants to borrow as needed and repay when cash flow improves. This can help manage seasonal fluctuations unexpected expenses, or seize opportunities for expansion without committing to a lump sum loan.

Interest Rate	6%
Term Length	3 to 24 months
Loan Amount	$5,000 to $500,000
Processing Time	48 hours

Pros

• Flexible access to funds allows restaurants to borrow as needed and repay when cash flow improves.
• Lower interest rates compared to a business credit card, reducing borrowing costs for short-term needs.
• Helps in refinancing debt and managing seasonal fluctuations or unexpected expenses without committing to a lump sum loan.

Cons

• Requires a good credit history and strong financials to qualify for favorable terms.
• Risk of overspending or reliance on credit may lead to debt accumulation and financial strain.
• Variable interest rates may increase over time, impacting the cost of borrowing.

Equipment Financing

Restaurant equipment financing can help you acquire essential equipment like ovens, refrigerators, or POS systems through financing, spreading the cost over time rather than paying upfront, preserving capital for other needs while ensuring efficient operations and quality service.

Interest Rate	7%
Term Length	5 to 60 months
Loan Amount	$10,000 to $5,000,000
Processing Time	1 week

Pros

• Spread the cost of essential equipment over time, preserving capital for other needs.
• Up-to-date equipment can improve efficiency, reduce operating costs, and enhance customer satisfaction.
• No need for a large upfront investment, making it accessible for restaurants with limited cash flow.

Cons

• Higher overall cost compared to purchasing equipment outright due to interest and fees.
• Risk of equipment obsolescence or breakdowns before the end of the financing term.
• Collateral may be required, putting restaurant assets at risk in case of default.

---

How to Compare and Evaluate Different Restaurant Loan Options

With all these options available, you might be wondering which one is the best for your restaurant business. Here are five tips to help you pick the top choice:

---

Are You Ready to Take Out a Restaurant Business Loan?

Here are a Few Signs to Watch Out For!

You run a financially healthy business.

Most people only apply for financial assistance when they need it the most. However, the best time to take out a business loan is when your restaurant is financially healthy. It may seem off-putting to apply for financing when you don’t need it, but there’s a logic behind this.

Lenders need assurance that you’ll be able to repay your loan on time. Demonstrating a healthy cash flow lowers your risk level as a borrower, which means lenders will likely approve your application and give you the best rates and terms.

Your calculations make sense.

Taking out a restaurant business loan can be financially risky. That’s why it’s important to do what you can to minimize this risk. Calculate whether the amount you’re going to borrow makes sense financially. After initial calculations, ask yourself the following questions:

• Do you have a contingency plan if things go wrong?
• Will your cash flow for the next few years support loan repayments?
• Will you still be able to repay the loan even if your growth and expansion efforts wouldn’t go as planned?
• Does the loan make sense from an ROI perspective?

You have a fool-proof business plan.

A business plan is an invaluable tool when it comes to business loan applications. It shows lenders that you’re serious about growing your restaurant, and you understand the costs associated with borrowed capital.

Make sure your business plan is as detailed as possible. At the very least, it should show financial projections outlining how much you need to grow your business, as well as how you’ll use the loan to grow your venture.

---

---

How to Get a Restaurant Loan at 1West

Create an account. Our fully-automated small business loan application only takes less than 15 minutes to complete. We may ask you to submit a document or two, but we make it easier for you to upload those documents securely.

Choose a loan. The next step is to choose the loan that best fits your needs. Compare loan offers from our network of 50+ lenders.

Given the number of loan options available, we understand that it can be hard to choose. So we’ll also give you access to our product wizard to help you decide on the most suitable type of loan for you.

Apply for a loan. Our application process is fast, simple, and fully automated. As soon as you provide your basic information, we’ll review your business performance immediately and get back to you as soon as we’re done.

---

Get Funded in as Little as 24 Hours!

You can use the money from a restaurant business loan to fund the following initiatives:

• Start a new business
• Purchase or repair equipment
• Open another branch
• Renovate your restaurant
• Improve your restaurant’s interior design
• Adjust floor plans to accommodate more customers
• Fund day-to-day operational expenses
• Create a cash reserve to offset unexpected expenses
• Launch marketing and advertising campaigns
• Expand your menu or sell new products

---

Get the Best Restaurant Business Loans at 1West

---