To get an SBA 7(a) loan for a restaurant, you must have reasonable equity to invest, like an already-profitable business. If that’s not you, you can offer other equity (like personal property) as collateral. You must have sought alternative financial resources before applying for the loan. The owner of the business cannot be on parole, the business must be operating in the U.S. or one of its territories, and it must be a for-profit business. Most lenders require the owner’s personal credit score to be at least 600, but exact requirements will vary depending on your experience in the industry and your relationship with your lender.

Certain banks are considered SBA Preferred Lenders, and have proven track records of providing small businesses with SBA-backed loans. There are other factors that could improve your chances when speaking with a lender.

The Small Business Administration (SBA) offers two types of loans for restaurants: SBA 7(a) loans and SBA 504 loans.

SBA 7(a) loans are the most popular type of SBA loan and are available for up to $5 million. They are best for larger, more established restaurants who need lower-cost commercial real estate financing.

SBA 504 loans are available for up to $5.5 million and are best for businesses who want to purchase property, buy equipment, and get working capital for their business.

In addition, SBA Express loans are a great choice for many restaurants who need $50,000 or less and have less-than-stellar credit.

The SBA 7(a) loan is a great option for restaurant owners because of its straightforward requirements and relatively fast approval process. The turnaround time for the SBA 7(a) loan is typically 2-3 weeks, depending on the lender. The SBA Express loan is another option that has a 36-hour turnaround, but it comes with higher maximum interest rates, lower SBA guarantees, and greater authority in the hands of the lender.

For more details about interest rates, fees, and other terms, head over to our Loan Terms page.

To apply for an SBA loan for a restaurant, you will need to provide the following documents:

• SBA Form 1919 (borrower information form)
• SBA Form 912 (statement of personal history)
• SBA Form 413 (personal financial statement)
• Financial statements, including a balance sheet, profit and loss, and income projection
• Agreement to purchase the business
• Letter of intent to buy the business
• Business tax returns for the past three years
• Any outstanding business debt
• Long-term business contracts
• Documentation of business assets
• Business lease agreement
• Incorporation documents and/or business license
• Business plan

In addition, the SBA will usually order an independent business appraisal to give lenders an idea of what the true value of the business is.

The SBA allows applicants to get help (for example, from a lawyer or a translator) filling out the application paperwork, but your lender will be required to submit information about who gave you help to the SBA, so you’ll need to document who this person is as well.

The SBA 7a and SBA 504 loan programs are great ways to finance a restaurant business. They offer a variety of benefits, such as:

• Purchase property
• Buy equipment
• Get working capital
• Potential for lower interest rates
• Longer repayment terms
• No collateral required for some loans

Additionally, certain banks are considered SBA Preferred Lenders, and have proven track records of providing small businesses with SBA-backed loans. There are other factors that could improve your chances when speaking with a lender.

For more information, please visit www.sba7a.loans/sba-7a-loans-small-business-blog/sba-7a-loan-for-a-restaurant and www.commercialrealestate.loans/restaurant-loans.