7 min read
Growth capital repaid in covers, not payments
How dining-credit funding works, what it really costs, and the kind of room it suits.
Funding options, 5 min read
The bank is almost always the cheapest money. It is also the slowest, and it wants your house.
If you have clean financials, two years of tax returns, time to wait and an appetite for a personal guarantee, an SBA 7(a) or conventional bank loan will cost less than anything else on this site. Most owners who end up elsewhere tried this route first.
At a glance
as of November 2026
- Typical size
- Up to $5M for SBA 7(a)
- Speed
- Weeks to months
- Guarantee or collateral
- Personal guarantee and collateral
- Cost structure
- Interest, capped around prime plus 3% on 7(a) loans above $350K; fees; a personal guarantee from every 20%+ owner; collateral
- Best for
- Owners with time, strong financials and the willingness to guarantee
How it works
An SBA 7(a) loan is a bank loan with a partial government guarantee that makes the bank willing to lend to a restaurant at all. Rates are capped relative to prime, terms run up to 10 years for working capital and 25 for real estate, and amounts go to $5M. It's the standard against which every other option should be priced.
The costs that aren't in the rate: a personal guarantee from every owner with 20% or more, collateral including your home in many cases, a stack of paperwork, and a timeline measured in months. Banks also lend against history, so a second location with no history of its own is harder to fund than the balance sheet suggests.
If you have the profile, do this first. If you've been turned down, or the expansion can't wait a quarter, that's the moment faster money without a guarantee is worth paying a little more for.
The trade
For
- ✓Lowest cost of the options here
- ✓Long terms, fixed payments
- ✓Large amounts available
Against
- ✕Slow
- ✕Personal guarantee and collateral
- ✕Heavy documentation; hard for a new concept
How we're paid
We may be paid when you apply to a lender through a marketplace we link to. Routing is the same whether or not we're paid. Full disclosure.
More funding options, explained
All of them
Find out which of these we'd place for your room.
Covers Advisory is an independent capital advisory, not a lender. We do not make funding decisions, and we are compensated by funding partners when a placement we arrange closes. Our recommendation is the same whether or not a partner pays us. How we're paid.