Business loans for restaurants, bars and cafes

Learn about your financing options when operating a restaurant, bar or cafe

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Running a restaurant, cafe or bar requires a lot of money. Sometimes a business loan is essential for covering your operating costs or financing new equipment or renovations.

This guide will run you through the types of loans available and help you find a loan that gives your business cash when you need it but doesn’t leave you with unsustainable debts or crippling repayment terms.

How can a business loan help my restaurant, bar or cafe?

A business loan can help your bar or restaurant at every stage, whether you’re a brand new business or a long-established one. A loan can help you with the following:

  • Fund the opening of your new restaurant or bar
  • Help your existing business during a cash flow shortage or other emergency
  • Pay for a renovation or expansion of your business
  • Buy an existing restaurant, cafe or bar
  • Purchase necessary, expensive equipment

OnDeck Business Loans Offer

OnDeck Business Loans Offer

  • Borrow up to $250,000
  • Same day approval
  • Automatic repayments
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100% confidential application

OnDeck Business Loans Offer

Apply online and get quick access to the funds your small business needs with a loan of up to $250,000.

  • Loan Security: Unsecured
  • Interest rate type: Variable
  • Upfront fee: 2.5% origination fee
  • Minimum loan amount: $10,000
  • Maximum loan amount: $250,000
  • Quick application and turnaround
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Loans for your restaurant, bar or cafe that you can compare today

Updated October 20th, 2019
Name Product Min. Loan Amount Max. Loan Amount Loan Term Upfront Fee Apply Now
6 months to 2 years
2.5% origination fee
Apply for up to $250,000 and receive your approved funds in one business day. Minimum annual turnover of $100,000 and 1 year of trading history required.
3 months to 1 year
3% origination fee
An unsecured business loan up to $300,000 for eligible businesses. Businesses operating for a minimum of 6 months and having turnover of at least $10,000 a month can apply.
3 to 18 months
2.5% establishment fee
Apply for up to $200,000 from Lumi and benefit from short loan terms, no early repayment fees and once approved receive your funds in just one business day.
3 months to 2 years
3% origination fee
A business loan available up to $300,000 that can be funded in 1 business day. Must have a turnover of $6,000+ per month and provide 6 months of trading history, 3 months history for existing business purchases.
6 months to 2 years
$0 establishment fee
A flexible business loan up to $500,000 with convenient top up and redraw facilities. Business must have been operating for 9 months+ and have monthly sales of $10,000+. Note: The establishment fee will be waived if you apply and are approved before 15 October 2019.
6 months to 2 years
2% drawdown fee
A business loan up to $100,000 for unsecured loans, or $500,000 for secured loans that you can use for any business purpose. Transparent costs and redraw facility available.
3 months to 5 years
$0 application fee
A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 70 lenders. Loans between $5,000 and $1 million are available. Request a call – your loan can be funded in 1 business day.
6 months to 3 years
$0 application fee
A loan of up to $500,000 that can be approved and funded within 24 hours. Available to businesses with 6+ months operating history and $5,000+ monthly sales.

Compare up to 4 providers

What types of business loans should I consider?

If you don’t have sufficient cash to fully fund your cafe or restaurant and you’re unable to get funding from an investor, you’ll need to consider a business loan. There are many different loans available and some will suit you better than others.

Loan TypeAmountLoan FeaturesRepayment
Business overdraft$10,000 - $100,000,000
  • Linked to an existing business account
  • Only accessible once your funds are exhausted
  • Unsecured loan
  • Variable interest rates
  • Useful in emergencies
Ongoing account, minimum repayments required
Line of credit$10,000 - $100,000,000
  • A credit line gives you quick access to cash
  • Only pay interest on money you spend
  • Options for ongoing or fixed terms (1-5 years)
  • Usually requires a good credit history
Regular, minimum repayments on your balance
Term loan$10,000 - $500,000
  • Borrow a single lump sum and pay it back
  • Fixed or variable interest rate
Regular fixed loan repayments
Equipment loanBorrow the cost of equipment
  • Borrow money to pay for necessary equipment
  • Lease or buy equipment
  • Possible tax benefits
Regular repayments with fixed or variable interest rates.
Unsecured cash loanBorrow the cost of equipment
  • Get cash quickly and without requiring security
  • Good for small, temporary cash flow shortages
Fees and higher interest rates typically apply
Invoice financingTypically 80% of the invoice amount
  • Use your unpaid invoices as collateral for a loan
  • Get quick access to cash
Fees and interest

The type of loan that’s best for you depends on your business, your financing needs and most crucially, your ability to repay the loan.

Case Study: Jim's Cafe

Jim has worked as a barista for six years and now wants to run his own cafe. He has $50,000 in savings which he plans to invest in his new venture. Jim uses this money to rent suitable premises and to buy an espresso machine, fridge, dishwasher and oven.

Jim calculates he’ll need at least another $25,000 over the next six months to cover staff wages, utilities and cost of goods until the cafe is firmly established.

Jim’s financing choice: Business line of credit

Jim opts for a business line of credit for the following reasons:

  • He wants fast access to cash when he needs it.
  • He doesn’t want to deplete all his funds before accessing extra cash (like with a business overdraft).
  • He wants to control his debt and repayments as well as avoid the pressure of having to repay a single large sum.

Luckily, Jim has good credit history. While he doesn’t have much in the way of assets for collateral, Jim’s parents agree to let him use their home equity. This means Jim can get a line of credit at a better interest rate.

How do I compare business loans?

When researching types of loans, you need to think about the needs of your business, the costs associated with the loan and how you will repay it. Consider the following:

  • Interest rates. Loans usually come with a fixed or variable interest rate. A fixed rate lets you plan repayment costs more accurately but may have fees for early repayment.
  • Flexibility. For some business owners, flexibility makes a loan more attractive. You may want to borrow more money during the loan period or repay your loan faster.
  • Repayments. Calculate how much you will need to pay each month and work out what you can afford (and what you can’t).
  • Fees. It’s worth comparing the fees different lenders charge. You might have to pay a fee for establishing a loan or an account as well as pay a monthly maintenance fee.
  • Loan terms. How long is the loan? You don’t want to lock yourself into a long, fixed loan if you’re dealing with a temporary cash flow problem. Likewise, a one-year loan isn’t much help if your business won’t be seriously profitable until much later.

What business costs do I need to consider?

If you currently run your own establishment, you probably have a clear understanding of your business costs. But if you’re opening up a brand new cafe or restaurant, it can be quite hard to estimate your business costs before applying for a loan.

Estimate your costs by considering the following:

  • Premises. Where are you planning to open your restaurant or cafe? Research the commercial rents and property values in the area.
  • Cost of goods. Check the wholesale prices of the goods and material your restaurant or cafe will need. Get in touch with suppliers and see what deals you can get.
  • Wages. If you’ll be hiring staff, make sure you know the minimum wage for your industry. Get a clearer picture of average wages by searching through hospitality job ads.
  • Utilities. Compare business energy plans online. If possible, ask a business owner how much they spend on utilities in a busy month.
  • Equipment and maintenance. As with goods, do your research on equipment costs. Make sure you factor in the ongoing costs of maintenance.
  • Licensing costs. Check with your state and local council to see what licensing costs you’re obliged to pay, especially if you want to serve alcohol.

How to compare an existing business

For a new business, it’s hard to know your costs before you start. You should definitely find a similar business and try to compare. If you’re planning on opening a cafe, for example, you can estimate your costs by doing the following:

  • Identify a similar-sized cafe in a nearby locale serving a comparable demographic (consider location, foot traffic, proximity to offices, train stations etc).
  • Spend an hour in the cafe, noting menu prices, counting the number of customers, their orders and the number of staff (do this in a quiet hour and again in a busy hour).
  • Make a rough calculation of how much the average customer spends.

While far from perfect, this method can give you a clearer idea of how much money your business can expect to bring in.

What are my chances of getting a loan approved?

Hospitality businesses have high rates of failure and lenders know this. Getting a loan approved depends on many factors.

    • Security. You’ll be able to borrow more from a bank if you have some form of security. This can be either a large amount of cash or a residential or commercial property. If you don’t have much in the way of security, you may need a family member or business partner to act as a guarantor.
    • Skills and qualifications. Say you want to open a cafe but you’ve never used an espresso machine in your life. This wouldn’t inspire confidence in a lender, would it? But if you have a barista qualification and the necessary skills, your business will look a lot more viable and so will your chances of getting a loan.
    • Experience. The same goes for experience. Your proposed restaurant stands a better chance of getting funding if you’ve already managed a restaurant for years.
    • Business plan. You need a detailed business plan. Clearly outlining the nature, purpose and goals of your business helps a lender make a better assessment of your loan application. Make sure to include an analysis of your competition as well as a realistic assessment of your costs and your cash-flow predictions.
    • Financials. If you have an existing business, you’ll have to show your financial data to a lender. You’ll need to be able to show a record of your profit and loss, your costs and your current debts and assets.

I want to buy an established restaurant or bar. What should I look out for?

There’s a lot to consider when buying an established business. You have to do a lot of research to make sure you’re buying a viable, legal business and paying an appropriate price for it.

Financing the purchase depends on whether you’re buying just the business itself (leasehold) or the business and the property (freehold).


With a leasehold, you are buying an existing business (and generally the fittings and fixtures inside the premises) and taking over the lease. You will not own the building.

Generally, a bank will lend you around 50% of the value of the business. You have to make up the rest using cash or other assets as security.


You are purchasing both an existing business and a commercial property. You may be able to borrow up to 100% of the property’s value if you combine equity in an existing property with a guarantor or with business assets.

Do your homework before buying

Whatever kind of business you’re buying, you need to look very closely at the financial and legal standing of the business.

  • Existing debts. Does the restaurant or bar have any debts attached?
  • Profits. Look at how much money the business is making after all its costs are covered. Look at profits over the last two years or more.
  • Assets. What assets come with the business?
  • Valuation. Don’t try to guess how much the business is worth. Get all the accounting data you can and consider the services of a professional valuer if you’re unsure of what you’re doing.

Changing trends. Nothing stays the same. You can’t predict the future, but you need to think ahead. A thriving cafe in a popular mall might not be such a great buy if a bigger mall is in development across the street.

Food trucks

The food truck trend has come to Australia in a big way. One advantage of running a food truck is you won’t have the enormous costs of renting or owning a premises. But you still have to buy or lease a vehicle and pay the ongoing running costs.

Another cost to consider is the permits and fees required by your state or city.

Depending on your business costs, you may need some kind of business vehicle or business equipment loan for your truck and equipment. If you already own a truck, you may need a short-term loan or line of credit to purchase ingredients and fuel as well as pay for permits.
Finance sorted? Learn about restaurant and hospitality insurance.

I have a few more questions about getting a loan for my cafe or restaurant

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2 Responses

  1. Default Gravatar
    GurmukhDecember 5, 2018

    Hiii looking for loan for restaurant thx

    • Avatarfinder Customer Care
      JohnDecember 10, 2018Staff

      Hi Gurmukh,

      Thank you for reaching out to finder.

      We are on the right page to make a comparison on lenders who could assist you in taking out a loan for your restaurant. Kindly review and compare your options on the table displaying the available providers. Once you have chosen a particular provider, you may then click on the “Go to site” button and you will be redirected to the provider’s website where you can proceed with the application or get in touch with their representatives for further inquiries you may have.

      Before applying, please ensure that you meet all the eligibility criteria and read through the details of the needed requirements as well as the relevant Product Disclosure Statements/Terms and Conditions when comparing your options before making a decision on whether it is right for you. Hope this helps!


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