How to Get an SBA Loan for a Restaurant

Step 1: Assess Your Qualifications

Before approaching lenders, honestly evaluate whether you meet the typical requirements for restaurant SBA loans:

Credit Score

Most lenders require a minimum 680 FICO score for restaurant loans. If you're below this threshold, work on improving your credit before applying, or find a co-borrower with stronger credit.

Experience

Lenders want to see 2-3 years of relevant food service experience, preferably with P&L responsibility. Front-of-house experience alone typically isn't sufficient—they want to see you've managed operations, not just worked in a restaurant.

What counts as relevant experience:

• Restaurant general manager
• Kitchen manager with budget responsibility
• Food service director (corporate, healthcare, education)
• Previous restaurant ownership
• Franchise management

Equity (Down Payment)

The SBA minimum is 10%, but restaurant loans typically require more:^[1]

• Existing restaurant acquisition: 10-15%
• Startup restaurant: 20-30%
• Change of industry: 15-20%

Step 2: Gather Your Documents

Having a complete document package ready speeds up the process significantly. Gather:

Personal Documents

• 3 years personal tax returns (all pages, all schedules)
• Personal financial statement (SBA Form 413)
• Resume highlighting food service experience
• Photo ID
• Proof of equity funds (bank statements, investment accounts)

Business Documents

• Business plan with 3-year financial projections
• Menu with pricing (for concept validation)
• Lease agreement or Letter of Intent
• Equipment list with quotes
• Buildout estimates from contractors
• Business licenses and permits (or applications)

For Acquisitions

• Signed purchase agreement or LOI
• Seller's 3 years tax returns
• Seller's year-to-date P&L and balance sheet
• Asset list and valuation
• Lease assignment terms

Step 3: Create a Strong Business Plan

Your business plan must demonstrate you understand the restaurant business and have realistic expectations. Key sections:

• Executive summary: Concept, location, funding request
• Market analysis: Demographics, competition, your differentiation
• Management: Your experience and key team members
• Operations: Hours, staffing, suppliers, systems
• Financial projections: 3-year P&L, cash flow, break-even analysis
• Use of funds: Exactly how the loan will be spent

Critical: Your projections must be realistic. Lenders review hundreds of restaurant plans—they know typical margins, labor costs, and ramp-up timelines. Overly optimistic projections damage your credibility.

Step 4: Find the Right Lender

Not all SBA lenders are comfortable with restaurants. Look for:

• SBA Preferred Lenders: Can approve loans without SBA review, faster process^[2]
• Restaurant experience: Ask how many restaurant deals they've done
• Local presence: Community banks often more flexible
• SBA Express lenders: For smaller loans under $500K needing faster turnaround^[4]

Apply to 2-3 lenders simultaneously. Terms and appetite vary, and you want options.

Step 5: Submit Your Application

Once you've selected lenders, submit a complete package. A complete application includes:

• Lender's application form
• SBA Form 1919 (Borrower Information)^[3]
• All personal and business documents listed above
• Signed authorization for credit check

Pro tip: Organize your documents logically with a cover sheet listing everything included. Lenders appreciate borrowers who are organized—it signals you'll run your business the same way.

Step 6: Work Through Underwriting

After submission, the lender will:

1. Pull your credit and verify information
2. Analyze your cash flow projections
3. Order an appraisal (for real estate deals)
4. Request additional documentation (expect this)
5. Present to their loan committee
6. Submit to SBA for authorization (if not a Preferred Lender)

Respond to document requests within 24-48 hours. Slow responses delay your loan and signal disorganization.

Step 7: Close and Fund

Once approved, you'll receive a commitment letter outlining terms and conditions. Before closing:

• Review all terms carefully
• Satisfy any conditions (insurance, lease execution, entity formation)
• Schedule closing with the title company
• Wire your equity injection
• Sign loan documents

Funds typically disburse within a few days of closing. For construction or buildout projects, funds may be disbursed in stages.

Timeline: What to Expect