Restaurant & food service financing.

Restaurants are one of the most misunderstood asset classes in commercial lending. Most banks avoid them; a few specialize in them. I know the difference — and which one to send your deal to.

Scenarios I work through in this industry

Restaurant acquisition

Buying an existing restaurant or restaurant group. SBA 7(a) with equity injection typically 15%-25% depending on operating history and lender.

Franchise development

New unit build-out for approved franchisees. SBA 7(a) or franchise-specific lending programs. Franchise brand approval + SBA franchise directory listing required.

Restaurant real estate

Owner-occupied CRE where the restaurant occupies its own building. SBA 504 is often the best structure if 51%+ owner-occupancy is achievable.

Equipment refinance / expansion

Kitchen equipment, POS, patio/renovation. SBA 7(a) or equipment finance.

Working capital

Seasonal cash flow smoothing or unit expansion working capital. SBA 7(a) working capital or bank lines for the strongest operators.

What I actually bring to your deal

Most community banks and regional banks are risk-averse on restaurants — food service default rates are higher than other industries, so they price it away or decline. But there is a small pool of specialty restaurant lenders (both bank and non-bank) that actively pursue restaurant deals and price them aggressively for the right profile: proven operators, franchise brands, strong unit economics, and clean personal credit.

Common questions

Can I get an SBA loan to buy my first restaurant?

Yes, but expect scrutiny on your operating experience. First-time restaurant owners face higher equity injection requirements (typically 20%-25% instead of 10%-15%) and more restrictive underwriting. Prior restaurant management experience, a strong franchise brand, or a strong operating partner all improve terms.

What franchise brands are SBA-approved?

SBA maintains a Franchise Directory listing pre-approved franchise systems. If your target brand is on the directory, the SBA process is standardized. If not, the brand's franchise agreement must be individually reviewed, which adds time and complexity to your loan process.

What DSCR do restaurant lenders require?

Most specialty restaurant lenders require a minimum 1.35x-1.5x DSCR on the target unit's historical or projected cash flow. Franchisees with multi-unit portfolios often get more favorable coverage requirements than single-unit operators.

Should I use SBA 7(a) or SBA 504 for a restaurant building purchase?

If you're buying the real estate AND the restaurant business together, SBA 7(a) can wrap both into one loan up to $5M. If you're buying just the real estate for a restaurant business you already own (51%+ owner-occupancy), SBA 504 typically offers better long-term real estate rates.