Restaurant Remodel Financing Options

Every restaurant needs a refresh now and then — new interiors, updated kitchen equipment, or expanded dining space can make a huge difference in attracting customers and boosting revenue.

But remodels can be expensive. Whether you’re updating your layout, adding outdoor seating, or renovating your kitchen, costs can easily reach $100,000 or more.

Fortunately, there are restaurant remodel financing options that let you upgrade without hurting your cash flow. This guide explains the best funding programs for renovations, how to qualify, and how to make smart financial choices for your restaurant’s future.

Why Remodeling Your Restaurant Is a Smart Investment

A restaurant remodel isn’t just about aesthetics — it’s about increasing profitability and longevity.

Here’s why many restaurant owners finance remodels:
✅ Increase seating capacity and serve more customers.
✅ Modernize interiors to attract new clientele.
✅ Upgrade kitchen equipment for faster service and energy savings.
✅ Improve accessibility and compliance with local codes.
✅ Boost online ratings by improving ambiance and cleanliness.

A well-planned renovation can deliver an ROI of 30%–50%, making financing a strategic investment rather than a cost.

1. SBA 7(a) Loans – Best for Full-Scale Remodels

The SBA 7(a) Loan Program is one of the most popular ways to fund restaurant renovations and upgrades.

Loan Highlights:

• Borrow up to $5 million

• Terms up to 10 years for remodels

• Interest rates typically 8%–11%

• Down payment as low as 10%

Eligible uses include:

• Kitchen or dining room remodeling

• HVAC and plumbing upgrades

• ADA compliance improvements

• Interior design and new fixtures

• Furniture, signage, and lighting

Because the SBA guarantees part of the loan, lenders can offer longer terms and lower rates, making monthly payments more manageable.

Best for: Established restaurants with 2+ years of profitability and good credit (650+).

2. SBA 504 Loans – For Major Construction or Expansion

If your remodel involves building additions, major property improvements, or real estate upgrades, an SBA 504 loan is a perfect fit.

Loan Structure:

• 50% bank loan

• 40% SBA Certified Development Company (CDC)

• 10% borrower down payment

Benefits:
✅ Fixed low interest rates
✅ Terms up to 25 years
✅ Ideal for large projects or franchise renovations

Example:
A restaurant owner uses an SBA 504 loan to expand kitchen space, add outdoor dining, and renovate restrooms — all financed with just 10% down.

3. Business Line of Credit – Flexible Funding for Ongoing Renovations

A business line of credit provides flexible, revolving access to capital — perfect for remodels that happen in stages.

How it works:

• Get approved for a limit (e.g., $100,000).

• Borrow as needed and repay as you go.

• Pay interest only on what you use.

Best for: Smaller renovation projects, repairs, or phased upgrades like repainting, lighting, or flooring.

Pro Tip: Keep your line of credit open even after the remodel — it’s great for covering short-term cash flow gaps.

4. Equipment Financing – Upgrade Kitchen and Bar Equipment

If your remodel involves new appliances, ovens, or refrigeration, equipment financing can help you buy or lease gear affordably.

Key features:

• Covers up to 100% of equipment costs

• Equipment serves as collateral (no large down payment)

• Terms from 2–7 years

• Fixed monthly payments

Eligible equipment includes:

• Commercial ovens and ranges

• Refrigerators and freezers

• POS systems and digital menu boards

• Coffee machines, dishwashers, and bar systems

Tax Tip: Under Section 179, you can often deduct the full cost of financed equipment in the year you purchase it.

5. Restaurant-Specific Financing Programs

Some lenders specialize in restaurant and hospitality loans, offering tailored solutions that understand the industry’s unique challenges.

Top examples:

• Restaurant Financing Group – Offers flexible loans and lines of credit.

• OnDeck – Short-term loans up to $250,000 with fast approvals.

• National Funding – Equipment and working capital loans for restaurant owners.

Advantages:
✅ Easier approval for food-service businesses
✅ Faster funding (as soon as 48 hours)
✅ Designed for remodels, new openings, or rebranding campaigns

6. Short-Term Working Capital Loans

If you need fast cash for small or urgent remodel projects — like fixing flooring, repainting, or upgrading restrooms — a short-term loan can provide funds within days.

Typical details:

• Loan amounts: $5,000–$500,000

• Terms: 6–24 months

• Fast online approvals

• Higher rates but faster turnaround

Best for: Smaller remodels or unexpected repair needs.

7. Commercial Real Estate Loans

If your remodel includes purchasing or renovating your restaurant property, a commercial real estate loan may be ideal.

Benefits:
✅ Finance both property and buildout costs
✅ 15–25 year terms
✅ Fixed or variable interest rates

You can also refinance existing property loans to free up equity for remodel expenses.

Featured Snippet: Best Restaurant Remodel Financing Options

1. SBA 7(a) Loans – Low-rate, long-term financing for renovations

2. SBA 504 Loans – For major property or construction projects

3. Equipment Financing – For kitchen and bar upgrades

4. Business Line of Credit – Flexible cash for phased remodels

5. Short-Term Loans – Fast funding for small updates

Example: A Restaurant Remodel Success Story

Business: Bella Vita Bistro – Phoenix, AZ
Loan Type: SBA 7(a) Loan
Amount: $400,000

After 10 years in business, Bella Vita needed a major update to stay competitive. The owners used an SBA 7(a) loan to:

• Remodel the dining area and bar

• Upgrade the kitchen with energy-efficient appliances

• Add outdoor seating for 40 guests

Results:

• 35% increase in weekend sales

• Improved online reviews

• Shorter ticket times due to faster kitchen operations

Owner’s Quote:

“The remodel completely transformed our business. Financing made it possible without touching our emergency funds.”

How to Choose the Right Financing Option

✅ Match the loan to your goal (remodel vs. expansion vs. equipment).
✅ Compare interest rates and repayment terms.
✅ Review eligibility — SBA loans require good credit and documentation.
✅ Ask lenders about seasonal or deferred payments if your business has off-peak months.
✅ Always estimate ROI — your remodel should increase revenue enough to cover payments.

Final Thoughts: Remodel Without Risking Your Cash Flow

Remodeling your restaurant is one of the best ways to increase sales, attract new customers, and modernize your brand — but it doesn’t have to drain your savings.

With SBA loans, equipment financing, lines of credit, and industry-specific programs, you can fund upgrades affordably while keeping your business financially stable.

Start your remodel planning by exploring SBA-backed programs at
👉 sba.gov/funding-programs/loans
or speak with lenders who specialize in restaurant financing to compare offers tailored to your project.