Restaurant Mortgage Loans
We are pleased to offer restaurant mortgage loans for the purchase or refinance of restaurant properties nationwide. Select Commercial specializes in restaurant financing for both seasoned operators and new owners. Whether you are starting a new business, or expanding an existing business, obtaining the right restaurant mortgage loan is almost as important as finding the right location for your restaurant. Many new owners underestimate the amount of capital needed to open and run a successful restaurant operation. Here are some of the typical costs that Select Commercial is able to finance: acquisition of the real estate and the business, furniture, fixtures, and equipment (FF+E), closing costs, working capital, and rehab/improvements. There are many costs involved in purchasing or expanding a restaurant and obtaining the right restaurant loan is crucial.
There are three main sources of restaurant loans: the US Small Business Administration (SBA loans), which include 7(a) and 504 loans, seller financing, and conventional bank loans. Most conventional lenders tend to steer clear of restaurant loans due to the risk profile of the real estate and the business. Many restaurants are sold using seller financing, but these loans are often short-term loans that need to be refinanced rather quickly. The overwhelming source for restaurant loans today is the Small Business Administration’s SBA loan program. These restaurant mortgage loans allow financing up to 90% LTV and offer terms as long as 25 years. These loans are easier to obtain than traditional bank financing because the SBA offers its guarantee to the lender in the event of default. This allows lenders to make riskier loans that conventional lenders might otherwise avoid. As an example, the SBA 7(a) program allows for loan sizes up to $5 million – enough for even the largest restaurants. Further, since the SBA program is intended to finance small businesses, the proceeds of a restaurant mortgage loan through the SBA can be used to purchase the business, as well as, the real estate. Most conventional restaurant lenders will only finance the real estate.
Many existing small business owners looking to refinance their loans, or obtain additional cash out, often find that they have trouble obtaining traditional bank loans due to their company’s size, specialized property type, credit rating, or difficulty producing tax returns. If you are starting up a new business or expanding an existing business, it may be possible for us to use projection-based income in order to qualify. Traditional banks can’t match the ability we have to “stretch the guidelines” to help your business grow. These loans have always been a large portion of our business. We actively lend on car washes, gas stations, restaurants, hotels and motels, bed and breakfasts, laundromats, service stations, bowling alleys, movie theaters, golf courses, marinas, retail stores, independent groceries, franchises, auto repair, manufacturing plants, liquor stores, health clubs, self-storage, mini-storage, parking garages, campgrounds, recreational facilities, RV parks, and many other single purpose properties. Let us help you start, purchase, refinance or grow your business! Our minimum loan size is $1,500,000.
It is important to choose a lender that has experience making restaurant loans and understands how to analyze these transactions. Call us today to discuss your restaurant loan request!
Our Commercial Real Estate Loan Benefits
• Commercial real estate loans for restaurants
• No upfront application or processing fees
• Simplified application process
• Up to 75% LTV, 90% with SBA
• Terms and amortizations up to 25 years
• Loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation
Our Reviews
Recent Closings
Restaurant Mortgage Loan Outlook for 2025
The restaurant industry has undergone significant changes in recent years, and the outlook for restaurant mortgage loans in 2025 is shaped by various factors, including evolving consumer behavior, economic conditions, and the adaptability of businesses. As we move into 2025, the restaurant sector continues to navigate these changes with a focus on innovation and resilience.
One of the major trends influencing the restaurant market in 2025 is the continued demand for diverse dining experiences. While traditional dine-in options remain popular, there has been a notable increase in demand for delivery, takeout, and outdoor dining. Restaurants that have adapted to these trends by offering multiple service options are better positioned to secure favorable mortgage terms. Lenders are looking for businesses that demonstrate flexibility and the ability to meet changing consumer preferences.
Interest rates for restaurant mortgage loans in 2025 remain competitive. Despite some fluctuations due to economic policies aimed at managing inflation, rates are still relatively low compared to historical standards. This environment is conducive to financing for expansion, renovation, or new acquisitions. Lenders are optimistic but cautious, focusing on restaurants with strong financials and a proven track record of profitability.
The economic recovery has played a crucial role in the restaurant industry. With job growth in various sectors, disposable incomes have risen, leading to increased spending on dining out. Restaurants located in areas with robust economic activity and growing populations are experiencing higher demand, making them attractive investments for lenders. Businesses that capitalize on local economic growth are more likely to secure favorable mortgage terms.
However, challenges remain for certain segments of the restaurant industry. Independent restaurants and those in areas with slower economic recovery may face more difficulty in securing financing. Lenders are more selective, favoring well-established businesses with a clear path to profitability. Properties that offer unique dining experiences or cater to niche markets are better positioned to attract investment.
Sustainability and innovation are key factors in the 2025 restaurant mortgage loan market. Restaurants that incorporate sustainable practices, such as sourcing locally, reducing waste, and implementing energy-efficient operations, are viewed favorably by lenders. Additionally, businesses that leverage technology for online ordering, reservations, and customer engagement are better positioned to thrive in the current market.
Overall, the outlook for restaurant mortgage loans in 2025 is positive, with opportunities for growth and investment in adaptable and innovative businesses. Restaurants that demonstrate resilience, embrace new trends, and focus on sustainability will have the best chances of securing favorable mortgage terms and thriving in the evolving market.