Financing for restaurants and hospitality
Restaurants and hotels invest in fit-outs and equipment and manage seasonal traffic.
Key points
- Restaurants spend heavily up front on fit-outs and kitchen equipment.
- Daily card sales give lenders a clear view of your cash flow.
- Equipment financing is often the easiest place to start.
- Lenders look closely at your lease and your track record.
How financing works in restaurants and hospitality
Restaurants and hospitality businesses face high start-up and renovation costs, tight margins and seasonal swings. A new location means a build-out, kitchen equipment, furniture and opening inventory, all before the first customer walks in.
The good news is that steady card sales give lenders a clear picture of your business, and kitchen equipment is a solid asset to finance against.
Common financing needs
Here’s how businesses in this industry typically match their needs to the right kind of financing.
| What you need | Usually the best fit | Why |
|---|---|---|
| Kitchen equipment and furniture | Equipment financing | Ovens, refrigeration and dining room furniture, financed over their life |
| Renovate or open a second location | Term loans | A lump sum for leasehold improvements and opening costs |
| Smooth out slower months | Lines of credit | A buffer for seasonal dips and unexpected repairs |
| Buy an existing restaurant | Business acquisition | Take over an established location with existing customers |
How NorthMerit can help
Apply once and we’ll connect you with one financing partner who works with businesses like yours. It’s free, and there’s no obligation.
What lenders look at
Lenders look at your monthly sales trend, your food and labour costs as a share of sales, your lease terms and how long you’ve been operating. A long lease with renewal options makes lenders far more comfortable financing a build-out.
For newer restaurants, your own experience in the industry and the strength of the location carry a lot of weight.
Other things partners commonly ask about: kitchen equipment and renovations; new locations; seasonal revenue.
Opening a second location
A restaurant group opens a second location for $350,000: a $200,000 term loan for the build-out and $150,000 in equipment financing for the kitchen.
How to prepare
Have 12 months of sales reports, your financial statements, your lease and quotes for equipment and construction ready. If it’s a new location, a simple projection of sales and costs helps the lender understand the plan.
Common questions
Is NorthMerit a lender?
Does it cost anything to apply?
Who will contact me?
The right financing, from the right partner.
Apply once. One financing partner who knows businesses like yours. Free, with no obligation.
