Business Loans for Restaurants and Hospitality

Restaurants, cafes, pubs and hospitality businesses have funding needs that rarely fit a standard high street bank loan. Refurbishing a kitchen before peak season, fitting out a second site, replacing failed equipment overnight, or simply covering staff and supplier costs through a quiet January are all normal parts of running a hospitality business, and all of them need capital at short notice. Sadi's Commercial Finance is an NACFB and FIBA registered commercial finance brokerage that arranges business loans and hospitality specific funding from lenders who understand how the sector actually trades.

Who it is for: independent restaurants, cafes, takeaways, pubs, bars, dark kitchens and multi site hospitality groups needing capital for refurbishment, equipment, marketing, expansion or working capital.

Who we help

We work with hospitality operators across the UK, from single site independents to groups running a dozen locations. Typical clients include an owner operator taking on a second unit, a family restaurant replacing a twenty year old kitchen, a coffee chain funding a fit out, and a catering business buying vehicles and equipment ahead of a large contract.

Hospitality is a sector where the numbers on paper often understate the business. Margins are thin, wages and food costs move month to month, and trading is seasonal. A lender who does not know the sector reads that as risk. A lender who does know it reads card turnover, covers per week and site location, and prices accordingly. Getting in front of the second kind of lender is most of the work.

What we arrange for hospitality businesses

  • Unsecured business loans for refurbishment, marketing and working capital, typically repaid over one to five years with fixed monthly payments
  • Secured business loans where property or other assets are available, usually at lower rates and over longer terms
  • Merchant cash advance repaid as a fixed percentage of daily card takings, so repayments fall automatically in quiet weeks
  • Asset finance for kitchen equipment, refrigeration, coffee machines, EPOS systems and delivery vehicles
  • Revolving credit facilities for businesses that want a buffer available rather than a lump sum drawn on day one

Common uses in hospitality

  • Kitchen refurbishment and equipment upgrades
  • Fit out costs for a new site or a relocation
  • Marketing campaigns to drive footfall and covers
  • Buying out a partner or acquiring an existing restaurant
  • Smoothing cash flow through seasonal quiet periods
  • Bridging the gap between a lease being signed and a site opening
  • Building a delivery and takeaway operation alongside dine in

How the process works

  1. Initial conversation. Tell us what the money is for, roughly how much you need and when you need it. We respond the same working day.
  2. Review your trading position. We look at recent bank statements, card merchant statements and your latest accounts to understand turnover, seasonality and existing commitments.
  3. Shape the request. We work out whether a fixed loan, a card linked advance or asset finance is the right structure, and how much is realistically supportable against your trading.
  4. Approach the right lenders. We go to lenders with a genuine appetite for hospitality rather than submitting the same application everywhere, which protects your credit file.
  5. Compare terms. We present the offers side by side with the total cost of each, not just the headline rate.
  6. Complete. We manage the paperwork through to drawdown and stay available afterwards.

What lenders assess

For a hospitality business, lenders concentrate on card and bank turnover over the last six to twelve months, the consistency of that turnover across the year, the length of your lease and how much of it is left, existing debt and any outstanding advances, the directors' experience in the sector, and your personal credit position. Filed accounts matter, but for restaurants a lender will often weigh recent merchant statements more heavily than accounts that are a year old.

Seasonality is not a barrier. A business that is quiet in January and busy in December is normal, and lenders that specialise in the sector expect it. What causes problems is a short remaining lease, a stack of existing short term advances, or turnover that is falling rather than simply moving with the seasons.

What it costs

Pricing depends on the structure, the security available and the strength of your trading. Unsecured business loans are priced on risk and are generally more expensive than secured lending. Merchant cash advances are quoted as a factor cost on the amount advanced rather than an annual rate, so the total cost of the facility is the figure to compare. Asset finance is usually the cheapest option where the funding is for equipment, because the equipment itself is the security.

Our broker fee is disclosed in writing before you commit to anything, and we will always show you the total cost of each offer rather than only the monthly payment.

How long it takes

A merchant cash advance can often be arranged within a few working days where card statements are readily available. An unsecured business loan typically takes one to two weeks. Secured lending against property takes longer because a valuation and legal work are involved. We will tell you at the outset which of these your case realistically fits.

Case studies

A Central London restaurant secured a £65,000 business loan to refurbish its kitchen and fund a marketing campaign, delivering measurable ROI within the first quarter. Separately, a multi-site restaurant chain secured a £550,000 merchant cash advance to fund a new site fit-out and marketing, with repayments tailored to daily card takings so the business could grow without fixed monthly pressure.

Why use a broker rather than your bank

Hospitality businesses often have strong card revenue but thin margins and seasonal swings, and high street lenders do not always price that fairly. A single bank can only offer you its own product. We compare fixed business loans against card turnover linked options across a whole panel, so the repayment profile fits how your business actually trades rather than how a credit model assumes it should.

We are registered with the NACFB and FIBA, and we are paid to find the right structure, not to sell a particular product.

Frequently asked questions

Is a business loan or merchant cash advance better for a restaurant?

It depends on your revenue pattern. A fixed business loan suits predictable trading and makes budgeting simple. A merchant cash advance suits businesses with strong, steady card sales that want repayments to flex with turnover, so a quiet month costs less than a busy one.

Can a new restaurant get funding?

It is harder without trading history, but options exist depending on the owner's experience, the security available and the strength of the business plan. Asset finance for equipment is often achievable earlier than an unsecured loan. Speak to a specialist to understand realistic options before you commit to a lease.

How fast can hospitality funding be arranged?

Card turnover based options like a merchant cash advance can often be arranged within days. Fixed business loans typically take one to two weeks depending on documentation. Secured lending takes longer.

Do I need to secure the loan against my home?

Not necessarily. Unsecured business loans are available and are common in hospitality. A personal guarantee is frequently required, which is different from a charge over your property, and we will explain exactly what any lender is asking for before you sign.

Can I get funding if I lease rather than own my premises?

Yes. Most hospitality borrowers are leaseholders. Lenders will look at how long is left on the lease, and a short remaining term can limit the loan length available, so it is worth talking to us before a lease renewal rather than after.

Will a poor credit history stop me borrowing?

Not automatically. Some lenders weight recent trading performance more heavily than historic credit issues, particularly where the difficulty has an explanation and turnover has since recovered. The terms will reflect the risk.

Can I repay early?

Most business loans allow early repayment, though some carry an early settlement charge. Merchant cash advances have a fixed total cost that does not reduce for early repayment. We will point out which applies before you commit.

How much can a restaurant borrow?

It is driven by turnover rather than a fixed cap. As a rough guide, unsecured lending is commonly assessed against monthly card and bank turnover, and merchant cash advances are typically sized against average monthly card takings. Secured facilities can go considerably further.

Related guides

Speak to us about restaurant funding

Tell us what you are trying to do and we will tell you honestly whether it is fundable, roughly what it will cost and how long it will take. We respond the same working day. Contact Sadi's Commercial Finance.