The Small Business Administration (SBA) offers a variety of loans and other tools that can help your restaurant get competitively priced capital for your business. The SBA flagship loan programs are the 504 and SBA 7(a), which are well suited for restaurants. Both programs are provided through lending partners. The 504 program is offered through Certified Development Companies ( CDCs) that partner with your local bank. The 7(a) program is a guaranteed loan program offered through SBA-approved banks.

Standing the heat

Kitchen equipment is a large part of a restaurant’s costs and can be difficult to finance. The 504 program is for the purchase and renovation of fixed assets such as real estate and long term equipment up to $5.5 million. Additionally, 504 loans are ideal for these kinds of expenses and can also be used for acquisition, renovation and expansion of an existing building, including adding a second location.

The 7(a) program offers a variety of options that can assist a restaurateur with working capital, purchasing equipment, leasehold and inventory financing up to $5 million. The 7(a) program also offers streamlined processing for small loans. SBA has an online lending marketplace called Lender Match where borrowers are matched with SBA-approved borrowers. To date, this application has enabled over 3 million financing leads to SBA-approved lenders, resulting in over 100,000 borrower/lender matches.

How to qualify

To be eligible for either the 504 or 7(a) program, a restaurateur must be a for-profit business in the United States.

For more information, reach out to your local SBA Field office. Our experienced SBA Lender Relation Specialists will be able to direct you to resources, such as SCORE, Small Business Development Centers, Woman Business Centers and Veteran’s Business Outreach Centers, and our lenders/CDCs that can help you develop and present a business plan, and obtain financing.  

The SBA can help you get smart on your financing options so you can avoid the common pitfalls of starting your own business.