Funding Growth for Multi-Location Restaurants

Restaurant owners running multiple restaurant locations know the challenge: grow fast without burning through cash.

This article breaks down how funding can help you do exactly that, without sacrificing margins or momentum.

You’ll learn:

Which loan types match your stage of growth
How successful owners use capital to open locations and modernize kitchens
Why financing is a tool to move faster and smarter
Pay Trust makes funding strategic and stress-free, especially when the scale is on the line.

Juggling employees, overhead, payroll, taxes, equipment, and seasonal fluctuations is all part of owning a restaurant. However, this can make it seem impossible for busy restaurant owners to pursue everything from big opportunities like relocating to everyday problems like broken equipment.

To help finance restaurant purchases without disrupting cash flow, most seek restaurant business loansfrom outside sources, including banks and private credit lenders.

But with so many options available, how do you even know where to start? Here’s a breakdown of the types of restaurant business loans available and the best providers.

What Is a Restaurant Business Loan?

A restaurant business loan is a financing option specifically designed to meet the unique needs of restaurant owners. These loans provide access to capital that can be used for various purposes, like purchasing equipment, renovating space, expanding operations, or managing cash flow.

Types of Restaurant Business Loans

Restaurant business loans come in various forms, each with its own terms, eligibility requirements, and interest rates.

	Best for …	Interest Rate	Loan Term	Funding Speed
Business Line of Credit	Flexible cash flow management	Varies	Revolving	Fast (few days)
Equipment Financing	Upgrading/replacing equipment	Varies	12-60 months	Slow (a few days to a week)
Cash Flow Financing	Short-term cash needs	Varies (based on revenue share)	3 to 5 years	Fastest (24 hours)

Business Line of Credit

Best for: Flexible cash flow management

A restaurant business line of credit is one of the fastest, most convenient financing options available at your disposal, designed to meet the exact needs of your business. One of its best features is that you only pay interest on the amount that you use, not on the whole amount of the line of credit.

Even if you do not have an immediate need for funding, a line of credit is always smart to have for emergencies or when an incredible opportunity arises.

Restaurant owners have been taking advantage of business lines of credit for discounts on bulk purchasing, short-term cash flow, fast access to working capital, bridging of slow account receivables, and taking advantage of exciting opportunities with a small window to pay their taxes in a timely fashion.

As opposed to other restaurant financing options, business lines of credit are revolving, which means that you can borrow up to a predetermined amount, pay, and draw more funds as needed. You can choose between an unsecured line of credit (doesn’t require collateral) and a secured line of credit (requires collateral).

Equipment Financing

Best for: Upgrading/replacing equipment

Among the most common restaurant financing options you can apply for is restaurant equipment financing. As a restaurant owner, you can lease or finance the necessary equipment to run your establishment.

Leasing offers affordable monthly payments through customized terms specific to your business. There are typically comprehensive packages offered, ranging from 12- to 60-month terms, which offer a solution to any type of restaurant owner. This type of financing or leasing usually has great tax benefits as well.

With restaurant equipment financing, it is also important to know that the financed equipment itself usually serves as collateral, potentially reducing the need for additional security. You can choose between fixed and variable interest rates.

Cash Flow Financing

Best for: Short-term cash needs

Cash flow financing provides a unique way for restaurants to obtain funding by tapping into their future sales. This model involves a lender essentially purchasing a percentage of your projected revenue at a discounted rate.

It provides your restaurant with an upfront cash advance, repaid through a portion of your incoming revenue stream. This type of financing is often more accessible and efficient for addressing short-term cash needs, as most funds can be secured in 24 hours or less.

Additionally, repayment is typically aligned with your daily sales, fluctuating based on your business performance rather than adhering to a fixed schedule. They’re also typically unsecured, meaning you don’t have to put up any collateral.

Where to Secure a Restaurant Business Loan

Restaurant business loans can be secured from various sources, each with its pros and cons. Choosing the right lender depends on factors like repayment flexibility, credit score, and the urgency of funding. Here’s a breakdown of each type of lender so you can make the best decision for your restaurant.

	Best for …	Interest Rate	Loan Term	Funding Speed
Private Lenders	Fast funding and flexible options	Varies (higher than banks)	Varies (shorter than banks)	Fast (24 hours – few days)
Small Business Administration (SBA) Loans	Low rates and longer terms	Prime rate	Up to 25 years	Slower (weeks to months)
Traditional Bank Lenders	Lowest rates and longer terms	Prime + 2-3%	Up to 10 years	Slower (weeks to months)

Private Lenders

Best for: Fast funding and flexible options

Private credit lenders have grown in popularity in recent years due to their fast, streamlined application process. They may offer more flexible repayment options than traditional banks. This route might also be better for restaurants seeking smaller loan amounts or those with less-than-ideal credit.

While interest rates may be higher than a traditional bank loan, private lenders’ requirements are typically more lenient, and some can help you secure funding faster.

Small Business Administration (SBA) Loans

Best for: Low rates and long terms

With prime rates, huge offers, and long terms, loans backed by the Small Business Administration are one of the best restaurant financing options for restaurant owners.

However, many don’t know that SBA-supported loans are surprisingly hard to get. If you are one of the lucky ones who actually gets approved, your personal assurance and even collateral will certainly be needed to back the funding.

You might find that when your own individual funds are on the line, the stress might make it harder for you to succeed. Fortunately, National Business Capital offers SBA loans with eliminated wait times, funding in as little as 24 hours, and an easier approval process!

With SBA loans, you can get up to $5 million in funding, with repayment terms of up to 25 years.

Traditional Bank Lenders

Best for: Lowest rates and long terms

Compared to other financing options, they typically offer lower interest rates and longer repayment terms, making them suitable for long-term investments like purchasing property or major renovations.

However, they have more stringent qualification criteria. Banks often require a strong credit score, a well-established business track record, collateral, and detailed financial documentation.

The collateral requirement alone often makes this a nonviable option for restaurants. Additionally, the lengthy application process makes banks inaccessible for newer restaurants or those with less-than-perfect credit.

How to Compare Business Loans for Restaurants

Before you apply for any type of restaurant financing options, here are some words of wisdom. Choosing the wrong lender will wind up hurting your restaurant more than helping, so choose wiselyand do your research.

Traditional lenders are known for giving restaurant owners the raw end of every deal. Approval is extremely difficult, and processing speeds are often sluggish at best.

Choosing the right lender will result in easier approval, faster funding, and greater growth potential. Here are some aspects to keep in mind before getting a restaurant loan:

Purpose of loan: Different loans suit different purposes. For example, equipment financing is ideal for purchasing equipment, while a line of credit might be better for managing cash flow.
Interest rate and fees: Compare APRs from different lenders and be aware of origination fees, closing costs, and prepayment penalties. A financial advisor can guide you through the best options for your situation.
Terms: Consider repayment length and schedule. Longer terms mean lower monthly payments but more total interest. However, options like cash flow financing can be great for short-term needs with a more flexible repayment schedule.
Time to fund: If you need money quickly, private credit lenders often have faster approval and funding than traditional banks. If time is on your side, you may be able to prioritize a lower interest rate with a traditional or SBA loan.
Lender reputation: Look for reviews from other small business owners and choose a lender with a proven track record in the restaurant industry if possible.

Explore Restaurant Funding Options With Pay Trust

If you are looking to leverage the benefits of restaurant financing options, look no further than Pay Trust Corp. With a single application, you can get access to private credit lending that will help you make the best decision for your business.

Are you ready to get started? Apply here.

Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advice from Pay Trust Corp and the author. Do not rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely on this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there may be errors, omissions, or mistakes.