A restaurant business line of credit is revolving capital — you're approved for a maximum credit limit (typically $25,000 to $275,000), but you only draw funds when you actually need them. You pay interest only on the amount you've drawn, not the full credit limit. As you repay what you've borrowed, your available credit replenishes, ready to draw again when needed.
Lines of credit are ideal for restaurants because restaurant cash flow is inherently unpredictable. A great Saturday night, a brutal Tuesday lunch, a seasonal slowdown — your capital needs change constantly. A line of credit gives you flexibility traditional loans can't match.
How a Restaurant Line of Credit Works
Once approved for a line of credit, you receive access to a credit account. To draw funds, you simply request a transfer through our online portal — typically funds hit your business bank account within hours. Repayment is structured as a series of small daily or weekly automatic ACH withdrawals based on what you've drawn, typically over 6-18 months per draw.
When a Line of Credit Beats a Term Loan
- Unpredictable cash flow needs — You don't know exactly how much you'll need or when
- Seasonal business — Capital needs spike in summer or holiday season then drop
- Multiple smaller needs over time — Better than taking a single large loan
- Emergency reserve — Want capital available without paying for it until needed
- Building business credit — Demonstrates responsible credit management
Line of Credit vs Working Capital vs Credit Card
Line of Credit
Pre-approved limit. Draw what you need. Pay interest only on drawn amount. Replenishes as you repay. Typical rates 9-25% annually. Best for ongoing variable needs.
Working Capital Loan
Lump sum disbursed at once. Fixed daily/weekly payments. Pay interest on entire amount. Best for defined one-time need, fastest funding.
Business Credit Card
Revolving credit, typically much smaller limits ($10K-$50K). Higher interest rates (18-29%). Best for small recurring purchases, building credit.
Qualifying for a Restaurant Line of Credit
- Time in business — Minimum 12 months operating (24+ months preferred)
- Monthly revenue — Minimum $15,000 (most approved restaurants do $25K+)
- Credit score — Minimum 580 (650+ preferred for higher limits)
- Business bank account — Active account with consistent deposits
