Financing by Restaurant Type
How much you need to borrow depends on where and how you serve food. Here's how startup costs and financing tend to line up for each type of restaurant.
| Restaurant type | Biggest up-front costs | Financing that often fits |
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| Full-service restaurant | Buildout, dining room furniture, a full kitchen, and staff, with a median startup cost of $275,000 to $425,000 | SBA loans or short-term loans for the buildout, and a line of credit for slow periods. An MCA can also work at a higher cost. |
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| Fast casual or quick-service | Construction and POS systems and kiosks | Equipment financing for the kitchen line, and short-term loans for a second location or renovation |
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| Food truck | $50,000 to $300,000 all in, covering the truck, a wrap, commissary fees, and permits | Equipment financing for the truck, plus a short-term loan or line of credit for everything else |
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| Ghost kitchen | Shared kitchen rent ($15 to $45 per hour) and delivery app fees of 15% to 30% | A line of credit for inventory and delivery costs during slow periods |
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| Franchise | Franchise fees of $15,000 to $40,000 and initial investments from about $199,000 to $1.8 million for the brands below | Term loans for fees and startup costs, a line of credit for day-to-day expenses, or SBA loans for eligible brands |
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| Bakery | Ovens ($3,000 to $50,000+), mixers, proofers, and display cases | Equipment financing, plus a line of credit for holiday orders and slow-season payroll. Here's more on bakery business loans. |
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| Bar | A liquor license ($1,792 to $4,352 for two years in New York), bar equipment, and inventory | A line of credit or MCA for inventory. Here's a closer look at whether bars are profitable. |
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Food Trucks
Food trucks are often cheaper to open than a restaurant, but the costs can add up quickly. All in, you can expect to spend anywhere from $50,000 to $300,000, depending on where you're located, the cost of your inventory, and the type of truck you select.
Here are some typical startup costs to keep in mind:
New food truck
$90,000 to $250,000
Used food truck
$50,000 to $100,000
Vehicle wrap
$2,500 to $10,000
Commissary kitchen fees
$1,000 to $1,400 a month
City mobile food permit
$500 to $5,000+, depending on the location
An equipment loan can cover the cost of the truck itself, while a short-term loan or business line of credit takes care of the wrap, permits, and commissary fees.
Established restaurants adding a food truck usually have an easier time qualifying for a loan. If this is your first business, look for a startup loan like an SBA Microloan. To qualify for financing through Clarify Capital, you need at least six months of operating history.
Ghost Kitchens
A ghost kitchen sells through delivery and pickup. This cuts out the storefront lease and front-of-house buildout, which is typically a big startup cost for restaurants.
You can rent a space in a shared kitchen for roughly $15 to $45 per hour, but costs vary depending on the space. The tradeoff is delivery fees. DoorDash and Uber Eats charge 15% to 30% per delivery order.
Those fees can squeeze your margins. I've seen ghost kitchen owners use a business line of credit to cover inventory and the cost of delivery during a slow period.
Franchises
Franchises require an extensive up-front investment but come with several benefits. Franchisors typically provide some form of business support as part of your franchise fee. They also often come with recognizable brand names, which can help with your initial marketing efforts.
Each franchisor posts its own requirements. Here are three examples of major franchises (Dunkin', Tropical Smoothie Cafe, and Subway) and what it costs to open one:
| Franchise | Franchise fee | Initial investment | Minimum net worth |
|---|
| $40,000 | $443,000 to $1,832,500 | $500,000 |
| $15,000 | $199,135 to $536,745 | $150,000 net worth and $100,000 in liquid assets |
| $35,000 for the first location | $275,500 to $770,500 | $1 million+ |
Franchisees often lean on term loans to cover franchise fees and other startup costs. For inventory, payroll, and other day-to-day expenses, business lines of credit tend to fit. If you're looking for an SBA loan, lenders typically check that your brand meets the SBA's eligibility requirements before approving your loan.
Full-Service Restaurants
A full-service sit-down restaurant has the highest overhead cost of any type of dining establishment. You're paying for the dining room buildout and a full kitchen, plus the cost of staff (servers, cooks, hosts, bussers).
The median full-service restaurant startup cost ranges from $275,000 to $425,000. For a major up-front cost like this, SBA loans or short-term business loans tend to fit. To cover working capital costs during slow periods, restaurant owners tap business lines of credit. Merchant cash advances can fit here, too, but tend to be a more expensive option.
Fast Casual Restaurants
Fast casual and quick-service restaurants need less floor space and staff than full-service options. Up-front costs are typically lower. Most of your money will go to paying for your cooks, a hood system, and ordering technology like a POS system and kiosks. You'll also have to factor in the cost of takeout and delivery.
Equipment financing can cover the kitchen line. A short-term loan can pay for a second location or a renovation. Fast-casual restaurant construction costs $385 to $675 per square foot, while hood systems run anywhere from $15,000 to $40,000 to install.
Bakeries
Your oven is the most important part of your bakery. The cost depends on the size. Smaller, basic models will run you anywhere from $3,000 to $8,000, while rotary rack ovens can top $50,000. You'll also want to factor in the cost of mixers, proofers, and display cases.
In my experience, bakeries do a large share of their business during the holidays. A business line of credit can cover the cost of payroll during a slow season or fund a big order ahead of the Christmas season.
Bars
The liquor license is often a big up-front expense for bars. In New York, for example, a two-year on-premises liquor license costs $1,792 to $4,352, depending on the bar's location.
Inventory also ties up cash for bar owners. A business line of credit or an MCA can cover a large liquor order before a busy weekend. A HELOC can also fit here, though keep in mind that if you default, you could lose your home.
Restaurant Equipment Financing and the Lease vs. Buy Decision
Kitchen equipment is typically one of the highest costs after buildout and renovation. Here's a quick breakdown of some common kitchen equipment costs.
Convection oven
$2,500 to $35,000+
Commercial dishwasher
$2,500 to $35,000+
Complete dining tables
$200 to $1,800 each
Walk-in cooler
$5,000 to $40,000
Commercial kitchen equipment isn't cheap, and restaurant owners always ask me whether to lease or buy. The answer is that it depends on your needs. Here's how I break it down for them:
| |
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| You own it once the loan is paid off. | The leasing company owns it, though some leases let you buy it at the end. |
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| Little or no down payment when a lender finances 100% of the value. | Often a first payment and a deposit. |
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| Higher monthly payments. | Lower monthly payments. |
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| May qualify for the Internal Revenue Service's (IRS) Section 179 deduction. | Depends on the lease; ask your accountant how lease payments apply to your taxes. |
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| Tends to fit long-life equipment like walk-ins, ranges, and hoods. | Tends to fit tech that ages fast, like POS hardware. |
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How Lenders Evaluate Restaurant Loans
Lenders tend to view the restaurant industry as riskier than others.
Margins are thin, and revenue can be seasonally dependent. In 2025, 42% of restaurant owners reported that their business was not profitable, according to the National Restaurant Association.
Underwriting usually comes down to whether your cash flow can cover the monthly payments. Here's what lenders are typically looking for.
Clean bank statements
Lenders look for deposits that flow into a single business bank account. They also look for overdrafts or late fees.
Current financials
Your profit and loss statements and balance sheets should be well organized with your annual revenue and debt figures.
A clear plan for the money
Do you plan to use the money to open a new location or cover a renovation? Lenders may ask to see a business plan for how you'll use the financing.
A strong credit score
A higher credit score unlocks more competitive repayment terms and interest rates. If you have bad credit, you can still qualify for many loan options, though rates may be higher.
The right loan amount
The loan amount should align with the cost of your project. Smaller, well-supported requests tend to move through underwriting more quickly than large or vague ones.
An explanation of your seasons
Restaurants often struggle with seasonality. Prepare to explain to a lender how you cover costs during downtime.
Step 1:Apply online
It takes about two minutes. You'll need your business's legal name, EIN, time in business, monthly revenue, requested loan amount, owner contact information, and a credit authorization.
Apply here
Step 2:Connect with a lending advisor
A U.S.-based Clarify Capital lending advisor reviews the application, runs a soft credit pull (no impact to your score), and requests 3 to 4 months of recent business bank statements.
Step 3:Get matched and funded
Clarify Capital works with 75+ vetted lenders and matches your profile with the right financing. Approvals often get a same-day offer (SBA loans can take longer).
Managing Cash Flow Through Busy and Slow Seasons
If you're struggling with a slow season, here are a few habits I've seen make the slow months easier for my restaurant clients:
Open a business line of credit in advance
Apply before you need it. Submit your application during the busy season so you can use it during slow months. That way you won't be scrambling.
Build up a cash reserve during busy season
Setting aside some money for downtime gives you a cushion for payroll and other working capital costs when you experience a seasonal dip.
Time big purchases
Plan in advance for any major kitchen equipment replacements so you aren't surprised during a slow month.
Avoid stacking short-term debt
Taking another small business loan to cover debt can trap you in payments that outpace your sales.
If your business swings hard by season, seasonal business loans can be built around those patterns.
How to Spot a Bad Lender
Most lenders are reputable, but there are still some bad actors out there. Here are the red flags to look out for:
Fees before approval
A lender should never ask you to pay for anything before you're officially approved.
Guaranteed approval
Legitimate lenders review your finances before approving you. A promise of 100% approval should be a clear red flag.
No APR or total cost
The underwriting process should be clear from start to finish. Some states require lenders to disclose APR or total cost.
Pressure to sign today
Urgency should be a red flag. Reputable lenders give you a chance to read the contract.
A confession of judgment
This document lets a lender win a lawsuit against you without a hearing. If you see it on a contract, ask before you sign.
Withdrawals after payoff
If you've paid off your balance and the lender is still taking money, that should be an immediate red flag. Pay close attention to when your balance hits zero.
Working With Clarify Capital
Clarify Capital doesn't lend money directly. Instead, we connect our customers to 75+ vetted, reputable lenders across 7+ financing types. We've helped businesses secure more than $1 billion in financing through our network over 10 years.
Every loan applicant is matched with a U.S.-based lending advisor, never a call center or a chatbot. Your advisor reviews your numbers, explains what each offer costs, and lets you decide. That approach has earned us a 5.0 Trustpilot rating, the highest trust rating in the industry, and three out of four businesses come back to us for additional financing, nearly twice the industry average.
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