Restaurant Loan

Find out all about the different restaurant loan options that can be used to meet the needs of your business.

or call/WhatsApp us at +65 96196929

What are common restaurants funding needs?

This section is meant for owners who are currently running a restaurant. We’ll have another section for owners who are funding a new restaurant in a separate piece.

A restaurant loan can cover a wide range of expenses related to running a restaurant business. These include:

Unexpected repairs

Mishaps do happen, but the last thing you’d want in the fast-paced F&B scene is for unexpected breakdowns to cause longer-than-necessary delays in your operations. Seeking out solutions that can provide funds swiftly is key, as your business will be chalking up sizable losses in revenue for every day or hour that these equipment are not put to use.

Investing in top of the line technology

State of the art digital initiatives can help bring about improved productivity and efficiency, allow for greater flexibility in production and help address pressing issues that restaurants often face, such as the lack of manpower. Examples of newer technologies that F&B businesses can implement include:

  • Urban farming solutions to source fresh ingredients on-site

  • Cloud-based POS systems

  • Digital CRM and booking managers (for integration with booking systems like Chope)

  • RFID vending machines

  • Utilising robotics for food preparation

Combating seasonal changes

Festive seasons, holidays and food trends - such as the recent surge in the popularity of lobster rolls - can bring about a sudden rise in consumer demand. A loan may come in handy to help your business cover costs required for additional manpower, marketing promotions and ingredients to combat the seasonal impacts on your business.


Staying on top of consumers’ minds is a challenge, particularly in Singapore’s competitive F&B scene. New venues will need to invest in campaigns that help increase brand awareness and get trial purchases running off the ground, while established restaurants should focus on tactics that build brand loyalty, retain existing customers and generate word-of-mouth referrals.

Digital channels and strategies, like Google, Facebook and influencer marketing campaigns present an interesting opportunity for restaurant owners to attract and engage their customers.

Expansion and renovation projects

Thinking about expanding your restaurant business? Here are some signals that it may be time to start on an expansion project:

  • A growing customer base: Waiting is often part of the dining experience. But if your customers are constantly waiting for their dishes to arrive or to be seated, it’s a signal that it’s time to consider expanding your restaurant’s capacity - whether that’s bringing on additional staff, increasing your seating capacity or moving to a bigger venue.

  • Adding new items to your menu: New menu items, like introducing an afternoon tea special or a cocktail menu can serve as an additional source of profits. Apart from inventory and liquor licence costs, you may also need to invest in manpower if adding on a high tea or cocktail menu requires an extension of your restaurant’s operation hours.

  • Changes in consumer preferences: Food and restaurant trends come and go, and an interior renovation project or a change in menu could ensure that your restaurant is aligned with new consumer demands.

What are common types of restaurant loans?

Restaurant owners rarely own the premises on which they operate, nor possess a significant number of assets - save for essential kitchen equipment. As such, you’ll need to apply for unsecured loans or equipment leasing.

Unsecured loans

In contrast to secured loans - where you’re required to pledge certain assets as collateral - unsecured loans are not backed up any form of collateral. You will be assessed based on factors such as your business credit score and the strength of your cash flow. These types of loans allow for greater flexibility, as the funds may be borrowed for just about any purpose.

Equipment leasing

Equipment leasing is a financing option that works well if you’re looking to obtain a new equipment, or replace an existing one. In short, it’s a long-term arrangement to rent equipment.

Rather than make a purchase for an equipment outright, you’ll make smaller monthly payments out to your lender, typically over a duration of two to five years. When the lease ends, you’ll have the option of returning the equipment, or purchasing it at a fair market value.

Tips to help you prepare for a restaurant loan application

Restaurant net profit margins are usually thin, so it’s critical that you do the legwork to work out the capital and resources you might require.

  • Assess your needs: Assess if your business needs a short-term or a long-term loan. The former is typically used for unexpected repairs or seasonal needs, while the latter is used for large-scale renovation works, expanding to new venues or acquisitions.

  • Have a clear plan of action: To build up trust with your lender, you’ll need to show that you have a clear plan for your funds. If you’re obtaining funding for marketing purposes, prepare a document that summarises your marketing strategy and past performance. If the funds are to be used for equipment replacement, get an invoice from your supplier, and provide documents detailing the need for replacement. An example would be images showing a spoilt or outdated equipment.

  • Diversification is key: It’s good practice to show that you’re able to pay off a portion of the expense you’re seeking funding for. Preparing a proof of funds to show that you have the financial ability to cover part of the costs will help streamline your application process.

  • Zoom in on the details: It’s important to do the groundwork before you seek funding. Beyond coming up with sales, profit and cost projections, dive into the details to assess questions like: “How many dishes do I need to sell on the lunch menu to break even? Should tap water be offered free of charge?” And if you’re seeking funding for an expansion project, examples of key question to assess include: “Is our current venue capturing the maximum business opportunity? Am I running out of space for my supplies? How long will it take to recoup losses incurred during the renovation?”

  • Establish strategic partnerships to minimise risk: Experienced restaurateurs like Donald Link, founder of Herbsaint offers a handy tip: spread the risk to minimise your chances of getting into debt that you’re unable to pay off. In an OPEN Forum interview, he shared his experience of opening up his widely popular New Orleans venue: “There were four of us — myself, my father-in-law, and two others.” Each individual offered a contribution, in addition to a loan they had taken out together. “Over time, my father-in-law and I bought the others out, but in the beginning, it just made sense to go in on it together.”

  • Get your documents in order: It helps to be prepared, and to stay on top of all available funding options for your business in case of unexpected scenarios, such as a sudden cash crunch. Seek out lending platforms with streamlined application processes beforehand, so you can easily access funding in urgent situations. Ensure that you have a copy of all required supporting documents on hand.

Where can I get a business loan for my restaurant?

Bankers tend to view restaurant loans as shaky investments relative to other industries due to the fluctuating demand in the F&B sector. Some lenders may require you to demonstrate stellar records across a variety of factors, including relevant hospitality experience, a two or three year track record, solid credit history, a strong business plan or even 20-30 percent of your desired business loan amount in cash.

In addition to rigorous assessment processes, banks typically require a longer onboarding period - one that may last up to a duration of six months. As such, these loans may not lend themselves well to restaurant owners, given the ever-changing trends and fast-paced nature of the industry.

Knowledge Base