Restaurant Business Loans: Rates, Options & Eligibility

Typical Range

£5k – £500k

Average Loan

£75k

for restaurant

Decision Speed

24–48 hrs

for unsecured loans

Eligibility requirements

Minimum 6 months trading history (12 months preferred for better rates)
Monthly card takings of at least £5,000 for merchant cash advances
Registered UK business with a valid food hygiene rating
Personal guarantee typically required from the business owner

Loan types available

Unsecured Business Loan

Rate: 7.9% – 29.9% APR
Term: 1 – 5 years
Security: No security required
Best for: Kitchen upgrades, marketing campaigns, hiring staff, and covering seasonal cash flow dips

Secured Business Loan

Rate: 4.9% – 15.9% APR
Term: 1 – 15 years
Security: Commercial property or personal property
Best for: Purchasing premises, major refurbishments, or opening a second site

Merchant Cash Advance

Rate: Factor rate 1.15 – 1.45
Term: 3 – 18 months
Security: Repaid as a percentage of card takings
Best for: Restaurants with high card transaction volumes needing quick, flexible capital

Representative example

Borrow £75,000 over 36 months at 9.9% APR (fixed). Monthly repayment: ~£2,417. Rates depend on your circumstances and the type of loan.

Market context

The UK restaurant sector generates approximately £41 billion in annual revenue and employs over 1.8 million people. There are around 90,000 restaurants operating across the UK.

Common challenges

Tight profit margins averaging 3-9%, making cash flow management critical
Seasonal revenue fluctuations with quieter periods in January and early autumn
Rising food costs and energy bills squeezing margins further since 2022
High staff turnover rates increasing recruitment and training expenses

Bad credit?

Some specialist lenders consider restaurant businesses with imperfect credit. You may need a personal guarantee or higher rate, but options may be available. Fundably may use a soft credit check for matching, which does not affect your credit score. A hard check may happen if you choose to proceed with a lender.

Frequently asked questions

What type of loan is best for opening a new restaurant?

For a new restaurant opening, a secured business loan typically offers the best rates if you have property to use as collateral. You can borrow larger amounts over longer terms, keeping monthly repayments manageable. If you don't have property security, an unsecured loan of up to £500,000 is possible with a strong business plan and personal guarantee. Lendus will compare both options to find the right fit.

Can I get a loan for a restaurant refurbishment?

Yes, refurbishment loans are one of the most common uses of restaurant finance. Depending on the scale of works, you can use an unsecured loan for smaller refits (under £150,000) or a secured loan for major renovations. Some lenders offer specific hospitality refurbishment packages with repayment holidays during the renovation period.

How does a merchant cash advance work for restaurants?

A merchant cash advance gives you a lump sum upfront, which you repay automatically as a fixed percentage (typically 10-20%) of your daily card transactions. When your restaurant is busy, you repay more; when it's quiet, you repay less. There are no fixed monthly payments, making it ideal for businesses with fluctuating revenue. It is one of the fastest forms of finance, often funded within 48 hours.

Do I need to provide financial projections to get a restaurant loan?

For unsecured loans under £50,000, most lenders require just 3-6 months of bank statements and basic business information. For larger loans, particularly for new openings, lenders will want to see a business plan with financial projections, details of your lease or property, and evidence of your experience in the hospitality sector. Lendus can guide you through exactly what each lender needs.

Equipment finance for restaurant businesses

Buying a specific machine or vehicle is usually cheaper than a general business loan, because the asset itself is the security. These are the items restaurant businesses most often fund, with the price range we see quoted in the UK.

Equipment	Typical price range	Finance page
Restaurant Equipment	£5k to £200k	Restaurant Equipment finance
Bain Marie	£600 to £5k	Bain Marie finance
Banqueting Furniture	£2k to £50k	Banqueting Furniture finance
Bar Equipment	£3k to £60k	Bar Equipment finance
Bean To Cup Machine	£2k to £12k	Bean To Cup Machine finance
Beer Dispense System	£800 to £12k	Beer Dispense System finance
Blast Chiller	£2k to £18k	Blast Chiller finance
Buffet Counter	£1k to £10k	Buffet Counter finance
Catering Equipment	£2k to £150k	Catering Equipment finance
Cellar Cooling	£1k to £6k	Cellar Cooling finance
Charcoal Grill	£2k to £20k	Charcoal Grill finance
Coffee Cart	£5k to £25k	Coffee Cart finance

Browse all equipment finance pages

Understand the loan structures

The table above shows what a restaurant business borrows for. These pages explain how each kind of borrowing actually works, what it costs and who it suits.

Business loans for bad credit Government-backed business loans Merchant cash advance Revolving credit facilities Business loans with no personal guarantee Secured business loans Start up business loans Unsecured business loans

Ready to find the best restaurant loan?

Explore business funding options through Fundably.

Check Eligibility →

For UK limited companies with at least 3 months’ trading and monthly revenue.

Restaurant Business Loans