Restaurant cash flow doesn't fit traditional lender models. Thin margins, high seasonality, equipment-heavy capex, weekend revenue spikes. Here are every funding option restaurant operators actually use, with honest cost and trade-off comparisons.
SBA loans for restaurants
SBA 7(a) loans up to $5 million with 7-10 year terms and rates around prime + 2-3%. Best terms in the market for qualifying restaurants. Catch: 60-120 day approval, requires tax returns, P&L, business plan, and FICO 680+. Best for: established restaurants with strong financials and time to wait.
Equipment financing for restaurants
Ovens, walk-ins, fryers, ranges, ice machines, prep tables, hood systems, POS systems. Equipment financing uses the equipment as collateral — easier approval than unsecured loans. Terms of 1-7 years matching equipment useful life. New or used equipment qualifies.
Working capital / merchant cash advance
Fastest funding (24 hours), most accessible (FICO 500+), highest cost. Repayment via daily or weekly ACH. Best for: equipment failures (broken oven, walk-in down), payroll bridges, opportunistic inventory buys, marketing during slow seasons.
Toast Capital for Toast POS users
Toast Capital offers working capital advances exclusively to Toast POS customers. Repayment via percentage of daily Toast credit card sales. Pros: no separate underwriting, integrated with POS data. Cons: only available if you're on Toast POS, single product offering, limited to working capital structure.
Build-out financing for new locations
Opening a second location? Build-out financing covers leasehold improvements, kitchen build, dining room construction, opening inventory. Often structured as combination of equipment financing (for kitchen) and working capital (for build-out and opening inventory). $100K-$500K typical range for a quick service or fast casual second location.