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Del Taco Franchise Loan: The Complete Financing Guide for Del Taco Franchise Owners
Del Taco is one of the most recognizable quick-service Mexican restaurant chains in the United States, offering franchise owners a proven brand with a loyal customer base and a menu that stands apart from competitors. If you are considering opening a Del Taco franchise or expanding your existing locations, understanding your financing options is the first critical step toward making your investment a success.
In This Article
What Is Del Taco?
Del Taco is a fast-food chain founded in 1964 in Yermo, California. Known for combining Mexican-inspired fare - tacos, burritos, quesadillas - with classic American fast-food items like burgers and fries, Del Taco occupies a unique niche in the quick-service restaurant industry. The brand currently operates over 600 locations across more than 16 states, with the heaviest concentration in the Western United States.
Del Taco is owned by Jack in the Box Inc., which acquired the brand in 2021. This corporate backing has provided Del Taco with additional resources, operational support, and brand recognition. The company has continued its franchise expansion efforts, making it an attractive option for entrepreneurs looking to enter the fast-food sector with a differentiated concept.
Del Taco differentiates itself from pure Mexican fast-food chains like Taco Bell by serving both Mexican and American menu items, catering to a broader audience. Its menu includes premium items like fresh-grilled carne asada alongside value offerings, which helps it appeal to a wide demographic. The brand has also been investing in digital ordering, loyalty programs, and drive-through improvements to stay competitive in an evolving market.
According to data from the U.S. Census Bureau, the fast-food industry generates hundreds of billions of dollars annually, and franchise-operated quick-service restaurants continue to show resilience even during economic downturns. Del Taco's dual-concept menu gives franchisees a competitive edge in markets where customers want variety.
Why Finance a Del Taco Franchise?
Opening a Del Taco franchise requires a significant upfront capital commitment. Most entrepreneurs do not have $1.5 million to $3.3 million sitting in a bank account ready to deploy. Business financing allows qualified franchise owners to leverage other people's capital to build wealth-generating assets while preserving their own liquidity for operations.
Here are the primary reasons why Del Taco franchise owners turn to financing:
- Preserve Working Capital: Paying all startup costs out of pocket can leave a franchisee cash-starved during the critical early months of operation. Financing spreads the cost over time and keeps cash available for staffing, marketing, and unexpected expenses.
- Accelerate Multi-Unit Growth: Many successful franchise operators want to open multiple locations. Financing allows them to open new units without waiting years to save enough capital from existing profits.
- Build Equity Faster: A financed franchise that generates strong cash flow can build equity rapidly, especially when revenue exceeds loan payments by a meaningful margin.
- SBA Loan Eligibility: Del Taco is listed in the SBA Franchise Directory, making franchisees eligible for government-backed SBA loans with favorable rates and extended repayment terms.
According to reporting from Forbes, franchise businesses have a significantly higher success rate than independent startups, partly because they operate under a proven system with brand support. This makes lenders more willing to finance franchise purchases compared to unproven concepts.
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How Much Does a Del Taco Franchise Cost?
Understanding the full cost of opening a Del Taco franchise is essential before approaching any lender. Lenders want to see that you have a complete picture of your investment requirements, and underestimating costs is one of the most common reasons franchise loan applications get rejected.
Here is a breakdown of the primary Del Taco franchise investment costs:
| Cost Category | Estimated Range |
|---|---|
| Initial Franchise Fee | $35,000 |
| Real Estate and Construction | $900,000 - $2,200,000 |
| Kitchen and Restaurant Equipment | $200,000 - $400,000 |
| Technology and POS Systems | $15,000 - $35,000 |
| Signage | $20,000 - $50,000 |
| Opening Inventory and Supplies | $15,000 - $30,000 |
| Training Expenses | $10,000 - $25,000 |
| Working Capital (3 months) | $100,000 - $200,000 |
| Insurance and Permits | $20,000 - $40,000 |
| Total Estimated Investment | $1,497,200 - $3,321,000 |
In addition to these startup costs, Del Taco franchisees pay ongoing fees including a 5% royalty on net sales and a 4% marketing contribution. A monthly technology fee of $124 to $174 also applies. These recurring costs affect your cash flow projections and must be factored into your loan repayment planning.
Del Taco requires prospective franchisees to demonstrate at least $500,000 in liquid capital and a minimum net worth of $1,000,000. These financial qualifications align closely with what most lenders require when evaluating franchise loan applications.
Financing Options for Del Taco Franchise Owners
There is no single best financing path for every Del Taco franchise owner. The right combination depends on your credit profile, existing assets, business experience, and how much of your own capital you want to deploy. Below is an overview of the most effective financing options available.
Del Taco Franchise Financing Options at a Glance
SBA 7(a) Loan
Up to $5M, 10-25 year terms, low rates
SBA 504 Loan
Real estate and equipment, fixed rates
Equipment Financing
Finance kitchen and tech equipment separately
Business Line of Credit
Revolving credit for working capital needs
Conventional Term Loan
Flexible amounts for experienced operators
ROBS
Use retirement funds without penalties
Most successful Del Taco franchise openings involve a blend of two or more financing products. For example, a franchisee might use an SBA 7(a) loan for the majority of startup costs while securing a separate equipment financing line for kitchen appliances and a business line of credit for working capital. This layered approach maximizes capital efficiency and minimizes out-of-pocket expenses.
SBA Loans for Del Taco Franchises
Small Business Administration loans are the gold standard for franchise financing. They offer the most favorable interest rates and repayment terms in the market, and Del Taco's inclusion in the SBA Franchise Directory means lenders can move through the approval process more quickly.
SBA 7(a) Loans
The SBA 7(a) loan program is the most versatile and widely used option for Del Taco franchise owners. Key features include:
- Loan amounts: Up to $5 million
- Repayment terms: Up to 10 years for working capital, up to 25 years for real estate
- Interest rates: Prime rate plus 2.25% to 4.75% (variable or fixed)
- Down payment: Typically 10% to 30%
- Use of funds: Franchise fee, construction, equipment, working capital, inventory
For a Del Taco opening with a total investment of $2 million, an SBA 7(a) loan could cover $1.4 million to $1.8 million of the project cost, with the franchisee contributing the remainder from liquid capital. The extended repayment terms keep monthly payments manageable relative to expected revenue.
According to SBA.gov, the 7(a) program approved over $27 billion in loans in fiscal year 2024 alone, with franchise loans representing a significant portion of that total. Lenders familiar with the franchise industry process SBA franchise loans regularly and can guide applicants through the documentation requirements efficiently.
SBA 504 Loans
The SBA 504 loan is specifically designed for real estate and major equipment purchases. For Del Taco franchisees who plan to own their building rather than lease, the 504 program offers compelling advantages:
- Fixed interest rates locked for the life of the loan
- Loan amounts up to $5.5 million for standard projects
- 10% down payment requirement (lower than most conventional loans)
- Long repayment terms up to 25 years for real estate
The 504 structure involves three parties: the SBA-approved lender provides 50% of the project cost, a Certified Development Company (CDC) funded by the SBA provides 40%, and the borrower contributes just 10%. This structure makes large commercial real estate purchases accessible even for franchisees who lack substantial down payments.
SBA Express Loans
For franchisees who need faster access to capital, the SBA Express program provides loans up to $500,000 with approvals in as little as 36 hours. While this does not cover the full cost of a Del Taco opening, Express loans work well for working capital supplements or equipment purchases when you already have primary financing in place.
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Apply Now ->Equipment Financing for Del Taco
Commercial kitchen equipment is one of the largest line items in any restaurant franchise opening. Del Taco locations require industrial-grade fryers, grills, steam tables, refrigeration units, drive-through communication systems, POS terminals, and more. Equipment financing allows franchisees to fund these purchases separately from their primary loan, often with more favorable terms because the equipment itself serves as collateral.
Equipment financing for Del Taco typically covers:
- Commercial fryers and cooking equipment
- Refrigeration and freezer units
- Drive-through systems and speaker equipment
- Point-of-sale (POS) terminals and kiosks
- Food prep and storage equipment
- HVAC and ventilation systems
- Beverage dispensing equipment
Equipment loans typically feature loan amounts from $10,000 to $5 million, terms from 24 to 84 months, rates starting around 5% to 12% depending on credit profile, and fast approvals often within 24 to 48 hours. For a typical Del Taco with $300,000 in equipment needs financed over 60 months at 7%, monthly payments would run approximately $5,900 - a manageable figure given a well-performing location can generate $800,000 to $1.5 million or more in annual revenue.
One key advantage of financing equipment separately is that it preserves your SBA loan capacity for real estate and construction, where SBA terms provide the most value. By stacking an equipment loan alongside your SBA loan, you can maximize the total capital available while keeping each product optimized for its intended purpose.
How to Qualify for Franchise Financing
Qualifying for Del Taco franchise financing requires meeting both the franchisor's financial requirements and the lender's underwriting criteria. Here is what you need to have in order before applying:
Personal Credit Score
SBA loans generally require a personal credit score of at least 680. Conventional business loans from alternative lenders may approve borrowers with scores as low as 600. Higher scores (720+) open the door to the best rates and terms. If your score needs improvement, focus on paying down revolving balances and addressing any derogatory marks before applying.
Liquid Capital
Del Taco requires $500,000 in liquid capital as a franchisor requirement. Most lenders also want to see that you have 10% to 30% of the total project cost available in cash or liquid assets. For a $2 million project, that means having $200,000 to $600,000 available.
Net Worth
Del Taco's minimum net worth requirement of $1 million aligns with SBA guidelines for larger loans. Your net worth calculation includes all assets (real estate, investments, business equity) minus liabilities (mortgages, loans, other debts).
Business Experience
Lenders favor applicants with prior restaurant or franchise management experience. If this is your first franchise, partnering with an experienced manager or hiring a seasoned general manager can strengthen your application. Multi-unit franchise operators with a track record often qualify for better terms and larger loan amounts.
Business Plan
A comprehensive business plan demonstrating your understanding of the Del Taco franchise model, your target market, staffing plan, and financial projections is essential for SBA and conventional loan applications. Projections should be realistic and based on comparable Del Taco locations in similar markets.
Legal and Corporate Structure
Your franchise should be organized as an LLC, S-Corp, or C-Corp before applying for financing. Having a proper business entity in place, along with an EIN, business bank account, and any required licenses, shows lenders that you are operating professionally.
How Crestmont Capital Helps Del Taco Franchise Owners
Crestmont Capital has helped hundreds of franchise owners secure the capital they need to open, expand, and optimize their businesses. As one of the leading small business lenders in the United States, Crestmont specializes in matching franchise borrowers with the right financing products for their specific situation.
Here is what makes Crestmont Capital different for Del Taco franchise financing:
- Franchise Expertise: Our team understands the Del Taco franchise model, the FDD requirements, and the typical financing structure that works best for QSR franchise openings.
- SBA Loan Processing: Crestmont's SBA loan specialists can guide you through every step of the SBA application process, helping you compile documentation, structure your loan request, and maximize your approval odds.
- Equipment Financing: Our equipment financing programs provide fast approvals with competitive rates, letting you get your kitchen operational quickly.
- Business Lines of Credit: A business line of credit ensures you always have access to working capital for payroll, inventory, and unexpected expenses during the critical first year.
- Fast Turnaround: For time-sensitive opportunities, our fast business loans can get you funded in days rather than weeks.
- Bad Credit Solutions: Our bad credit business loans help franchisees who may not qualify at traditional banks.
According to CNBC, access to capital remains one of the top barriers to franchise growth for aspiring business owners. Crestmont Capital removes that barrier by providing franchise owners with a dedicated advisor who handles the complexity of business financing from start to finish.
Real-World Financing Scenarios
Understanding how financing works in practice helps you plan more effectively. Here are six realistic Del Taco franchise financing scenarios:
Scenario 1: First-Time Franchisee, Ground-Up Build
Maria is a former restaurant manager opening her first Del Taco in Phoenix, AZ. Total project cost: $2.2 million. She has $600,000 in liquid assets and a 720 credit score. She secures an SBA 7(a) Loan for $1,540,000 (70%) and contributes $660,000 cash (30%). Monthly payments of approximately $15,800 are well within her projected revenue capacity.
Scenario 2: Experienced Operator, Multi-Unit Expansion
James already owns three Del Taco locations and wants to open two more simultaneously. Combined project cost: $4.8 million. He structures an SBA 7(a) Loan for $3,360,000, Equipment Financing for $480,000, and contributes $960,000 cash. He leverages his existing track record to secure favorable rates.
Scenario 3: Real Estate Purchase via SBA 504
Lisa wants to own the building for her Del Taco location. Land and construction costs total $2.8 million. She uses an SBA 504 structure: CDC portion $1,120,000 (40%), conventional lender $1,400,000 (50%), and cash down payment of just $280,000 (10%). She also adds equipment financing of $350,000 and a business line of credit for $150,000.
Scenario 4: Conversion of Existing Restaurant
David is converting an existing QSR location to a Del Taco. He needs $800,000 for renovations, new equipment, and the franchise fee. Despite a 650 credit score, his industry experience helps him qualify for an SBA 7(a) Loan of $560,000, equipment financing of $160,000, and contributes $80,000 cash.
Scenario 5: Using a Retirement Fund (ROBS)
Robert has $400,000 in a 401(k) and uses a ROBS arrangement to deploy those funds as his equity injection without triggering taxes or penalties. Combined with an SBA 7(a) Loan of $1,400,000 and a business line of credit of $200,000, he opens his first Del Taco without depleting personal savings.
Scenario 6: Working Capital Supplement
Sarah opened a Del Taco six months ago and needs $150,000 for a major equipment upgrade during a high-growth period. She accesses a short-term business loan of $150,000 over 18 months, repaid well before the revenue benefits of the upgrade fully materialize.
Ready to Finance Your Del Taco Franchise?
Get fast, flexible franchise financing from the #1 business lender in the U.S. Apply in minutes.
Apply Now ->Frequently Asked Questions
How to Get Started
Complete our quick application at offers.crestmontcapital.com/apply-now.
A Crestmont Capital advisor will match you with the right financing option for your Del Taco franchise project.
Receive your funds and open your franchise - often within days of approval for equipment financing, or 30-90 days for SBA loans.
Opening a Del Taco franchise is one of the most exciting and potentially rewarding decisions an entrepreneur can make. The brand has over 60 years of history, a differentiated menu, and the backing of Jack in the Box Inc. With the right financing partner, you can transform your franchise vision into a thriving business that generates income for years to come. Crestmont Capital is ready to be that partner.
Disclaimer: The information provided in this article is for general educational purposes only and is not financial, legal, or tax advice. Funding terms, qualifications, and product availability may vary and are subject to change without notice. Crestmont Capital does not guarantee approval, rates, or specific outcomes. For personalized information about your business funding options, contact our team directly.
