Restaurants: what the right structure looks like

What owners use it for

• Kitchen equipment and hood replacement
• A second location build-out
• Remodeling the dining room
• Carrying payroll through a slow season
• Buying the building instead of renewing the lease

The cash-flow shape of restaurants

Revenue arrives here on its own terms: daily card and cash settlement, funds in two business days; third-party delivery remits weekly net of commission. On margin, prime cost — food plus labor — has to land near 60% of sales or nothing else matters. Net is often 4-8%.

The calendar matters too — weekly and seasonal patterns are sharp; a location's slow month is predictable to the week. A financing structure that ignores that calendar creates a payment obligation in the months the business is least able to carry one, which is how an otherwise healthy operation ends up refinancing at a worse price a year later.

What actually gets underwritten here

Daily deposits are the underwriting substrate — consistency of deposit days matters more than any single month's total. Lenders discount delivery-platform revenue for commission.

That is worth knowing before you apply, because the same business can look strong or marginal depending on which twelve months of statements are submitted and how the seasonality is explained. Weekly and seasonal patterns are sharp; a location's slow month is predictable to the week.

What owners of restaurants actually borrow for

Financing requests in this vertical cluster. These are the ones that come up most, and each one points at a different structure:

• Kitchen equipment and hood replacement
• A second location build-out
• Remodeling the dining room
• Carrying payroll through a slow season
• Buying the building instead of renewing the lease

The use of funds is not a formality on the application — it is what determines whether a term loan, a line, or equipment financing is the honest answer. Matching them properly is most of the value a broker adds.

The financing that actually fits this industry

Not every product belongs in this vertical. These are the ones that do, and the reason each one earns its place:

• Term loan. A fixed amount on a fixed schedule. It suits a defined project with a return you can point to, and it is the cheapest structure to compare because the total cost is knowable on day one.
• Equipment financing. The equipment secures the financing, so approval leans on the asset and your cash flow rather than outside collateral. It also keeps a line of credit free for the things that cannot be secured.
• Revolving line of credit. Capital that sits available until you draw it, with interest on what you use. It is the right answer when the problem is timing rather than a purchase — the money arrives before the receivable does and replenishes when it lands.
• SBA loan. Longer terms and lower rates than most alternatives, in exchange for more documentation and a longer close. When the timeline allows it, it is usually the least expensive capital a business of this size can get.
• Commercial real estate. Purchase, refinance, and cash-out on owner-occupied and investment property, including the SBA routes when the building is owner-occupied.

What to have ready

A complete file gets a real answer quickly; an incomplete one gets a maybe. For most businesses in this industry that means:

• The last four months of business bank statements
• Your average monthly revenue and roughly how it splits across the year
• Any existing business debt, including advances and equipment contracts
• What the capital is for, specifically

Your credit is not pulled to look at options. It is pulled when you decide to move forward on a specific offer.

Common questions

Ready for your next move?

Send a short application and your last four months of business bank statements. We'll come back with real options — what each costs and what it's good for.

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