Top 20 Banks for Restaurant SBA Loans


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Last quarterly update: May 9, 2021

Around 60% of new restaurants fail within the first year of opening. Even if you make it out of the first year, 80% close within the first five years.

The restaurant industry is a grueling marketplace where slim profit margins and tight labor demand can sink an investment. Yet, restaurants are a passion project, and there are plenty of passionate restauranteurs.

Like any other business, you’ll need start-up capital. Unfortunately, banks view restaurants as volatile investments and don’t want to take the risk associated with traditional business loans.

You’ll have to secure an SBA restaurant loan. What is an SBA loan, and how do you get one? Read more to find out.

What is an SBA Loan?

The US Government believes small business and entrepreneurship are the backbones of our economic system. They’re not wrong. 44% of all US economic activity comes from small businesses.

Given that percentage and how many people these businesses employ, the US government wants to encourage small business activity. They achieve this through the Small Business Administration (SBA).

The SBA administers loans to small businesses, such as restaurants, that private lenders consider high risk.

The SBA backs and insures the private institutions so that money flows out even for riskier investments.

SBA Loan Requirements

Both the SBA and private lenders have requirements for loan applicants. There are also businesses such as gambling and some real estate that do not qualify.

Before you begin the application process, make sure you meet these requirements.


Your business needs to be for-profit and not a passive income business like apartment buildings and life insurance. There are some passive income businesses like motels and hotels that are allowed.

Restaurants are a for-profit business and qualify for SBA loans.

Size of Business

What the SBA considers a small business varies under certain circumstances. The general rule is any new business under 500 employees qualifies.

The average single location independent restaurant, depending on size, employs no more than 50 people at one time.

Credit Score

An SBA loan for restaurants is not a grant, and it’s not free money. Your credit score and history face scrutiny as they would with any other loan.

To qualify for a loan from an SBA restaurant lender, you’ll need good standing credit. Both the SBA and private lenders consider a score above 680 as adequate for lending.

The SBA is a function of the US government. Because of this, they’ll examine your credit history with government debt. A high student debt load and any default history could dash your restaurant dreams.

Business History

Lending institutions are far more willing to lend to those who already own and operate an established business. That’s why so many restaurant owners often have and maintain other investments.

A lack of business ownership will not disqualify you. A lending institution requires at least two years of experience within the industry for a loan.

A career as a restaurant manager makes you a far better candidate for an SBA loan for restaurants.

How to Get an SBA Restaurant Loan

You have a dream, and you believe you meet the requirements for an SBA loan. Now you have to secure one. There are a few vital steps involved to get the money you need to open your doors.

Find a Lender

If you believe you qualify for an SBA loan for your restaurant, you must first find a lender who offers them. Banks, credit unions, and other lending institutions can lend this money.

It’s up to you to find one that participates. Some lenders qualify as “SBA Preferred Lenders.” These institutions qualify for this designation due to their willingness and ability to get businesses the money they need.

Apply for SBA 7(a) Loan

There are other financing options through the SBA, but the SBA 7(a) loan is, by far, the most popular for start-ups. Why? They offer new and existing owners purchasing flexibility.

With an SBA 7(a) loan, restaurant owners can use the money to:

  • Buy kitchen equipment and other vital restaurant items like tables and chairs
  • Purchase real estate or rental space
  • Solicit commercial or equipment repairs
  • Purchase operating software like a point-of-sale (POS) system
  • Refinance existing debt related to the business
  • Buy an already operational restaurant or franchise

If the SBA 7(a) loan isn’t the right option, you can also pursue an SBA 504 or an SBA Express loan. These programs, however, don’t offer the same flexibility or favorable rates.

Lock Up Terms

The number one reason your SBA restaurant loan might be declined is lack of cash flow. The bank determines you don’t have enough money, and they’re unwilling to assume the risk.

Once you’re approved, you’ll then have to agree to the terms of the loan. The SBA and private lenders calculate these terms based on the size of the loan and its purpose.

For example, SBA 7(a) loans for equipment mature at ten years. For a loan above $50,000, you’ll pay the base rate plus 2.2% interest.

Secure an SBA Restaurant Loan

The restaurant industry is a huge gamble, but most restaurateurs are willing to take it. Why? Restaurants are a passion and a dream.

You’ll need a considerable amount of money to open your restaurant. Some people can secure private investors with deep pockets to fund their dreams. Even if you have that kind of capital, you’ll still need more.

The US Government wants to help. You can secure an SBA restaurant loan to fund your dream.

Here’s our complete list of banks to help you open up your restaurant with a small business restaurant loan:

RankBankCityState# of LoansAvg Loan $Avg Int
1U.S. BankCincinnatiOH304$88,4447.4%
2The Huntington National BankColumbusOH205$202,1257.4%
3Bank of HopeLos AngelesCA90$305,2497.4%
5JPMorgan Chase BankColumbusOH80$205,7917.9%
6TD BankWilmingtonDE74$62,30110.5%
7Santander BankWilmingtonDE73$97,3669.5%
8Newtek Small Business FinanceLake SuccessNY61$794,7158.0%
10First Home BankSaint PetersburgFL45$416,5568.0%
11Wells FargoSioux FallsSD44$150,00210.3%
12Celtic BankSalt Lake CityUT39$603,7977.8%
13Hanmi BankLos AngelesCA34$375,3537.5%
14Commonwealth Business BankLos AngelesCA30$463,1007.2%
15Eastern BankBostonMA29$144,1698.0%
16PNC BankWilmingtonDE27$237,9787.5%
17Byline BankChicagoIL26$1,203,9238.1%
18Webster BankWaterburyCT25$217,0208.1%
19Banner BankWalla WallaWA24$439,4387.1%
20Cadence BankAtlantaGA24$436,7297.9%

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