How to Get Funding For Restaurant Startup (10 Best Sources)

By Rajib Hasan -- Saturday, 29 Jun, 2024

Financing or funding for restaurant startups is a crucial thing. Financing is the backbone of a business. From renting, decorating, equipment or ingredients purchasing, employee wages, and others require finance. Restaurant is a busy platform and different types of equipment are also required to manage culinary tasks. That’s why investment or financing plays a crucial role at all.   

What is Restaurant Funding Or Financing?

To meet all the financial issues to operate, expand, and enlarge the restaurant business is called restaurant funding or financing. Restaurant funding is mainly an investment in the restaurant business. From where should you collect funds? There are different ways and different zones to collect restaurant starting finance. So, let’s see how to fund for restaurant startup or how to manage restaurant startup business loans.    

Funding for Restaurant Startup (10 Best Tips)


Restaurant investment varies according to countries, locations, type of business, etc. In that case, it is pretty difficult to show clearly what exactly the amount is. But we may get an assumption. However, in the United States, restaurant startup costs range from $175,000 to over $700,000. Whereas around AED 800,000 to AED 1,000,000 is considered as the restaurant opening cost in the UAE.

It is noted that restaurant starting cost depends on the locations, size of a restaurant, furniture, and others. Look at that very high amount needed to start a restaurant. Most people may not have such an amount. In that case, despite their strong aspirations, people become knocked down from their dreams. In that case, a helping hand is required for financial support. So, let’s see how to collect funding for restaurant startups.

  • Investor.
  • Crowdfunding.
  • Loans from Family and Friends.
  • Equipment & Furniture Installment.
  • Bank loans for restaurants.
  • Merchant Cash Advance (MCA).
  • Business Credit Cards.
  • Look for Angel Investors
  • Venture Capital.
  • SBA loans.

1. Investor

An investor is a person who can invest in any business according to his/her opinion. To get investors in your restaurant business, share your proposal to an investor. If he/she feels better about this proposal then you may go for agreement according to your and the investor's opinion. 

Most investors demand a percentage of profit or ownership of a portion of your business. In that case, consultation is necessary besides the paper document. So, it may be the best way if you want to build your restaurant business with two partners. So, think and take steps.   

2. Crowdfunding

Crowdfunding is one of the best ways to finance collection. Collecting money from people via online for any specific purpose is called crowdfunding. This process came in 2015. This funding is mostly built for any charity, flood-affected people, suffering from famine, etc. 

However, any business entrepreneur can pitch business or product ideas to people. If business owners commit to returning the money to the donors, then people can assist. If you have a low budget and are committed to people, you may search for crowdfunding for a restaurant startup.

3. Loans from Family and Friends

Family and friends can be another good idea for funding restaurant startups. First of all, consult with family members and share your ideas. You may also share your idea with your nearest and close friend and have a potential chance to get money. 

You may borrow some money from your friend or take him as a restaurant business partner. On the other hand, obtaining money from family members will be the best idea. So, convince family members and get financial aid from your family.

4. Equipment & Furniture Installment

Equipment installment is another way for the entrepreneur. There are many restaurant furniture seller companies. They offer installment facilities for a specific time. In that case, the buyer gets some time to pay the bill. In most cases, this installment duration may be 6 months or more than that. 

It is noted that this installment process can be different according to the countries and locations. So, discuss with the equipment & furniture provider and get the equipment and furniture based on your privileges.    

5. Bank Loans for Restaurants

The bank loan is more popular for businesses. However, calculate your six-month overall restaurant cost. Now calculate how much you can invest by yourself. Then contact the bank manager to share ideas. An inspection team will inspect all the things related to your business. If all the documents perfectly match with the bank's requirements.

Then you will be eligible for a bank loan. It is noted to be confirmed about the percentage of interest and duration. You must have a sharp calculation of how long you should take to pay the loan. However, it may take some time but it is a popular funding source for the startup. 

6. Merchant Cash Advance (MCA)

Merchant Cash Advance (MCA) is an alternative loan for restaurants. Many small and medium agencies pay loans for a duration. In that case, they charge interest. This cost may be higher but they offer very smooth and fast cash. 

In that case, the MCA provider will judge your papers and will charge according to the agreement. However, as an entrepreneur, you may find an MCA provider and accept their aid. Because finance is always the heart or backbone of a business, to get the loan within a short time MCA will be the best way.  

7. Business Credit Cards

Business credit cards offer several advantages for a restaurant startup. They provide a convenient way to manage cash flow and purchase necessary supplies, equipment, and inventory without immediate out-of-pocket costs. 

Many business credit cards come with rewards programs that offer cash back, points, or miles for purchases in different categories such as dining, office supplies, and utilities, which can lead to significant savings. 

In most cases, business credit cards often come with an introductory 0% APR. Which allows starting to make large purchases and pay them off over time without incurring interest.

8. Look for Angel Investors

Angel investors are persons who provide finance for any business startup. Angel investors are highly financially strong people who are always ready to invest in the business. They often exchange for equity ownership. They would like to invest in the early stages of a business when it may be difficult to secure funding. Indeed angel investors try to receive an ownership stake in the company.

It can lead to significant returns if the business succeeds. On the other hand, you may contact them for business profit share opportunities. So, find the best Angel investor, make a smart deal, and invest in your restaurant business.

9. Venture Capital

Venture capital provides financial aid to the small companies. Venture capital plays a crucial role in the entrepreneurial ecosystem by providing the necessary resources for innovative companies. They also offer financial assistance to start the business. 

They contact through an agreement and they charge interest with a percentage. This amount depends on location, country, and other requirements. You may get financial help from venture capital for the newly opened restaurant business.   

10. SBA loans

SBA stands for small business administration loan. The US Small Business Administration supports it. SBA allows investment or finance to the small business by fulfilling their criteria or requirements. They help small businesses for financing those that do not qualify for through traditional lending channels. 

SBA offers financial help for businesses with special requirements. These loans can be used for a variety of purposes, including working capital, equipment purchases, and real estate. It can be the best way for financing for the restaurant business to start up.

Advantages and Disadvantages of Funding For Restaurant Startup

Funding for a restaurant startup must have advantages and disadvantages. So, it depends on the restaurant owner from where he/she will collect the funding. However, let’s see some advantages and disadvantages of funding a restaurant startup.


  • Adequate funding helps to select a significant place that can lead you to grow a restaurant business faster.  
  • With adequate funding, you can start your restaurant business smoothly.
  • With adequate funding, you can use restaurant management software to manage your entire restaurant tasks without hassle.
  • You can recruit skilled restaurant staff to serve significantly.
  • Restaurant funding will help your business with branding and marketing.


  • If you search for a bank loan then you may pay a higher amount with interest for a long duration.
  • If a loss occurs in your business then your property needs to be sold to pay the bank loan.
  • Investors may have a high demand for your restaurant business. It may harm your dream in the long run.
  • For loans and credit card lines, regular interest payments can become a burden to bear.
  • If you fail to pay the borrowing money from your friend then it may be the reason to spoil the good relationship.


Where to Collect Funding For Restaurant Startups?

More than a hundred organizations provide funding or financial aid to various business platforms. I have referred to 10 sources of funding for restaurant startups. Rest of that thing, there are a few more financial supporters, such as

  • Small industry.
  • Revolving credit line.
  • Purchase order financing.
  • Rapid Finance.
  • Food incubators.
  • Fora Financial, LLC.

How Hard Is It To Open A Restaurant With Cheap Costs?

We have been told several times that starting a restaurant business is costly. Restaurant startup funding depends on the type of restaurant, location, etc. However, opening a restaurant at a cheap cost is difficult. But you should make a sharp calculation depending on the restaurant type, food items, and other things. If you do that calculation then it will be clear how difficult it is to open a restaurant at a cheap cost.

So, you have to calculate step by step of every expense. Always focus on not investing in wasting money. Other factors should also be considered, such as menu planning, staff, equipment, restaurant marketing strategy, and finance. So, calculate and take steps gradually according to your plan and enlarge your investment.  

How Much Does It Cost To Fund a Restaurant in the USA, UK, and UAE?

Restaurant opening costs depend on the location, type of restaurant, size of a restaurant, etc. Remember, restaurant opening costs vary from time to time. However, let’s see an average restaurant startup financing.

  • The average restaurant startup cost in the USA is around $175,000 to well over $700,000.
  • The average cost in the UK is around £150,000 to more than £1 million.
  • Depending on the location and restaurant type on average AED 800,000 to 1,000,000 is required to open a restaurant in the UAE.

What type Of Restaurant Will Have the Lowest Labor Costs?

Salary and wages are crucial terms to run any business. Especially restaurant business, fast casual dining restaurants and quick-serve restaurants have low labor costs compared to white-tablecloth restaurants, and full-service restaurants. The white-tablecloth restaurant and full-service restaurant offer high restaurant staff costs.

Final Thought

How to invest in a restaurant startup depends on the location, restaurant type, restaurant shape, decoration, technology, and others. If you don’t have sufficient funds to invest or run a business then you may collect money from other sources. 

But how to get funding for a new restaurant? I have referred to some strategies from where a person may get financial aid to invest in his business. So, take a decision, and decide which one will be the best way for funding for restaurant startup.