Financing for restaurants
Card settlement is daily and predictable, which reads well. Rent, food cost and payroll are relentless, which is usually what the money is for.
How the money reads
An underwriter reads six months of statements. This is what yours usually says.
- Card processors settle daily or every few days, so deposits are frequent and steady.
- Cash sales, where they exist, have to be deposited to count — an underwriter reads the account, not the till.
- Seasonality is normal and expected: a patio summer and a quiet February do not read as a problem.
The thing that slows these files down
Multiple locations under multiple accounts need all of the accounts. A file with one location's statements reads as a much smaller business than the one applying.
What it usually pays for
- Equipment — an oven, a walk-in, a hood
- A build-out, or a second location
- Bridging a slow month without touching supplier terms
What an underwriter asks
The same four things decide every file: revenue and how long you have been making it, the cash cushion, bounced payments, and what you already pay other lenders. Here is what those look like in this trade.
- What is the daily balance, not the monthly total?
- A room can turn over a lot and still end most days near zero. The cushion is measured as the average daily balance against a month of revenue, and it is the figure that separates two restaurants with identical sales.
- Is every location in the file?
- Two rooms under two accounts read as one small restaurant if only one set of statements arrives. Send all of them, including the account that only pays suppliers.
- What already comes out for other lenders?
- Daily-remittance advances are common in food service and they are visible in the statements from the first page. Everything you already pay lenders counts toward a cap of 20% of monthly revenue.
The whole method, in one page: giving yourself the best shot.
Asking for the right amount
A month of revenue is the anchor. For a build-out, ask for what the build-out costs rather than a round number — a quote attached to a concrete use gets read faster than a larger ask with nothing behind it.
Across every trade the anchor is the same: roughly a month of revenue, and never more than the statements support. Everything you already pay lenders counts toward a ceiling of 20% of monthly revenue, so what is already running matters as much as what you are asking for.
When to ask
Apply before the season you are funding, not during it. A patio build needs the money in March, and a file sent in June is competing with your own busiest weeks for the attention it needs from you.
Have these ready as well
On top of the standard file — six months of statements, your incorporation documents, your CRA business number and photo ID.
- Your food premises licence and, if you serve alcohol, the liquor licence
- The lease, for a build-out or a second location
- A quote for the equipment, if that is what the money is for
- Statements for every account, including the one the card processor pays into
What usually fits
In this order, more often than not — though the file decides, not the trade.
Term loans
A fixed amount, a fixed schedule, and nothing pledged against it. The straightest answer when you know the number and the timeline.
$5,000 – $2,000,000
Equipment financing
The oven, the van, the line. Financed against the thing itself, so the payment sits against what the thing earns.
$10,000 – $1,000,000
Revenue-based line of credit
Draw what you need, pay for what you draw, and the limit moves with what you turn over. For months that are uneven rather than short.
Up to $500,000
Where these files get harder
None of these is an automatic no. They are the things that turn a one-day decision into a conversation, and all of them are better said by you than found by an underwriter.
- Cash sales that never reach the bank — an underwriter reads the account, not the till
- A room open less than six months, since six months of statements is the file
- Two or three daily-remittance advances already running
Questions
- We are seasonal. Does a quiet February sink the file?
- No. Seasonality is expected in food service and it is read in context. What matters is what the quiet months look like relative to the busy ones, not that they exist.
- Can I get financing for a second location?
- Yes, and it is one of the most common reasons a restaurant applies. Send the lease or the offer along with the statements for the room you already run.
- Does a daily-remittance advance stop me borrowing again?
- Not by itself. It uses part of the 20% of monthly revenue that can go to lenders in total, so it reduces the room rather than closing the door.
- How much of the card processing do you need to see?
- All of it. If the processor pays into one account and the bills leave another, both accounts belong in the file.