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.
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.
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+).
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.
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.
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.
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
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.
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.
SBA 7(a) Loans – Low-rate, long-term financing for renovations
SBA 504 Loans – For major property or construction projects
Equipment Financing – For kitchen and bar upgrades
Business Line of Credit – Flexible cash for phased remodels
Short-Term Loans – Fast funding for small updates
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.”
✅ 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.
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.