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What are Restaurant Business Loans?

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There are two types of business loans best for restaurants: for small and for large investments. Short-term loans for small investments are suitable for different replacements and upgrades. They usually don’t exceed $150,000. The line of a credit is the most popular solution. When you apply for small business administration loans for restaurants, you don’t need a minimum personal credit score. Still, some lending websites such as Kabbage do check the credit.

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The main disadvantage of this loan type is high interest compared to other options. APRs usually start with 9% and can be as high as 100%. Kabbage offers very high APRs and small loan terms (comparing to other options) – up to 12 months (while other services offer 24 months and more).

You can also consider applying for a credit card or a line of credit. Its line of a credit might be a little bit smaller but you can apply for competitive APRs and rewards such as cashback on purchases.

If you need long-term business loans for restaurants, you should consider Small Business Administration loans first. They offer the lowest APRs between 8.5% and 9.21%. Still, the application process is long and you might face exhausting paperwork. If you apply to online lenders, the average interest rate for business loans for restaurants is 25%.

In fact, restaurants financing is very developed now and you will find suitable option even with weak creditworthiness.

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