Restaurants can use every major SBA loan program: 7(a) loans of up to $5 million for buying, opening, expanding or refinancing, 504 loans of up to $5.5 million for a building or long-life equipment, and microloans of up to $50,000 for smaller needs. SBA loans are made by banks and other SBA-participating lenders, not by the SBA itself, and the SBA guarantee usually means longer terms than a restaurant could get otherwise, in exchange for more paperwork and time.
This page is part of our restaurant business loans guide. It explains which SBA program fits which restaurant project, what the SBA and lenders require, how long it takes and where restaurant owners most often run into problems. For a general overview of the programs, see SBA loans explained: 7(a) vs 504 vs microloans.
SBA programs for restaurants compared
Figures checked on September 21, 2026, from SBA.gov. Rates are set by each lender within SBA maximums, so compare offers by APR (annual percentage rate), which combines interest and most fees into one yearly cost.
| Program | Maximum | Restaurant uses | Term | Trade-offs |
|---|---|---|---|---|
| Standard 7(a) | $5 million | Buying a restaurant, build-out, equipment, working capital, refinancing | Up to 10 years; up to 25 with real estate | Most documentation; equity and collateral rules |
| 7(a) Small | $350,000 | Smaller build-outs, equipment, working capital | Same maturity rules as 7(a) | Guarantee of 85% up to $150,000, 75% above |
| SBA Express | $500,000 | Working capital, equipment, smaller projects | Revolving lines up to 10 years; otherwise 7(a) rules | SBA guarantees 50% to the lender, versus 75% on standard 7(a), so lender criteria vary |
| 504 | $5.5 million | Buying, building or renovating the restaurant’s building; long-life equipment | 10, 20 or 25 years | Fixed assets only; no working capital or inventory |
| Microloan | $50,000 | Small equipment, furniture, inventory, working capital | Up to 7 years | No real estate or paying off existing debt |
Sources: SBA pages for 7(a) loans, types of 7(a) loans, 504 loans and microloans. Since July 4, 2026, borrowers can also combine 7(a) and 504 loans for up to $10 million, up to $5 million from each program. That matters for a restaurant group buying its building and financing a second location at the same time.
Matching the program to the project
- Buying an existing restaurant. The SBA lists changes of ownership among 7(a) uses. See our restaurant acquisition loans page for equity rules, seller notes and deal points.
- Opening a new restaurant. 7(a) loans can fund build-out, equipment and working capital for a start-up, but lenders scrutinize new restaurants closely. Our restaurant startup loans page covers what to expect.
- Buying your building. A 504 loan, or a 7(a) loan with real estate, allows terms of up to 25 years.
- Kitchen equipment. 7(a) and microloans can cover equipment, and so can ordinary restaurant equipment financing, which is often faster.
- A small need. SBA says “the average microloan is about $13,000”, with rates generally between 8% and 13% depending on the SBA intermediary lender that makes the loan.
Costs and rates
SBA 7(a) rates may be fixed or variable, and the SBA caps how far above a base rate the lender can go. Many lenders quote SBA rates as the prime rate plus a spread. The Federal Reserve reports the bank prime rate was 7.00% on September 17, 2026, up from 6.75% the day before.
On top of interest, SBA charges lenders an upfront guaranty fee and an annual service fee, with amounts published each fiscal year, and the lender may have its own closing costs such as packaging, appraisal and legal fees. SBA’s fiscal year 2026 fee schedule took effect on October 1, 2025, so a new schedule applies to loans from October 1, 2026. Ask each lender for a written list of every fee you will pay and whether it is paid upfront or rolled into the loan.
Who qualifies
The SBA’s basic eligibility rules say a business must operate for profit, do business in the U.S. or its territories, “have reasonable owner equity to invest” and use other financial resources, including personal assets, before seeking SBA help. Restaurants are not among the business types SBA lists as ineligible, such as lending, gambling or speculation businesses. Beyond the SBA’s rules, lenders look at:
- Cash flow. For an existing restaurant, tax returns and financial statements that show enough cash to cover the new payments with room to spare. For a new restaurant, projections built on realistic sales and costs.
- Experience. Time in restaurant management or ownership. For a new concept, a detailed business plan and projections.
- Equity. Expect to put in your own money for a start-up or a purchase. The SBA has issued SOP 50 10 8.1, effective October 1, 2026, which revises its equity rules, so ask your lender in writing what equity injection it will require for your loan.
- Collateral. For 7(a) loans of $50,000 or less, SBA says it does not require collateral. Above that, lenders follow their own collateral policies, but SBA says “a loan is not to be declined solely on the basis of inadequate collateral.”
- Credit. Personal credit history for owners who guarantee the loan. See our guide to SBA loan credit score minimums.
SBA rule changes on October 1, 2026
The SBA has issued SOP 50 10 8.1, effective October 1, 2026, an update to the rulebook lenders follow for 7(a) and 504 loans. If you are applying now, ask your lender in writing which version will govern the loan and whether it changes your equity, seller note or collateral requirements.
Franchise restaurants
SBA lenders use the SBA Franchise Directory “in evaluating the eligibility of a small business that operates under an agreement.” The directory file on SBA’s site was dated September 9, 2026 when we checked. SBA adds that a listing “is not an endorsement or approval of the brand.” If you are opening or buying a franchised restaurant, ask the franchisor whether the brand is listed and see our page on restaurant franchise financing.
How long it takes
SBA lists its own turnaround at 5–10 business days for standard 7(a) loans and 2–10 business days for 7(a) Small loans. That covers SBA’s review only. Gathering documents, the lender’s underwriting, appraisals, lease review and closing take longer, and a build-out or purchase adds steps of its own. Our SBA loan timeline walks through each stage.
Common problems in restaurant SBA applications
- Tax returns that understate sales. Lenders size the loan to reported income. If cash sales weren’t reported, the business will look smaller than it is.
- Underestimating the build-out. Hoods, grease interceptors, fire suppression and permits can push costs past the plan. A contingency line in the budget helps the lender see you have planned for it.
- A lease that doesn’t match the loan. A short lease or no renewal option makes a long-term loan harder to justify. Negotiate the lease with the loan in mind.
- Using short-term money first. A merchant cash advance taken while waiting for an SBA loan is priced with a factor rate (a fixed multiple of the amount advanced, so the total cost is set up front regardless of how fast you repay), and existing daily payments reduce the cash flow available for the SBA loan.
- Waiting too long. SBA loans take weeks to close. Start before you need the money, especially ahead of a lease deadline or a seller’s closing date.
SBA loans for restaurants: FAQs
Can I get an SBA loan to open a new restaurant?
Yes. Start-ups are eligible, but expect lenders to want restaurant experience, a detailed plan and your own equity. The SBA’s equity rules are being revised effective October 1, 2026, so confirm the required amount with your lender.
What is the largest SBA loan a restaurant can get?
A single 7(a) loan goes up to $5 million, and a 504 loan up to $5.5 million. Since July 4, 2026, combined 7(a) and 504 financing can reach $10 million.
Can an SBA loan be used for restaurant working capital?
Yes, through 7(a) loans, SBA Express and microloans. The 504 program can’t be used for working capital or inventory. For ongoing seasonal needs, a business line of credit may be a better fit.
Do I need collateral for a restaurant SBA loan?
Not for 7(a) loans of $50,000 or less. For larger loans, lenders take available business assets and often a lien on real estate the owners hold, but SBA says a loan should not be declined only because collateral is short.
Next step
Before you apply, pull together three years of business and personal tax returns (or a business plan and projections for a new restaurant), your lease or letter of intent, and a list of what the money will pay for. Our restaurant business loans hub explains how SMB Compass helps you compare SBA and other offers from the lenders we work with.
Sources
- SBA: 7(a) loans
- SBA: Types of 7(a) loans
- SBA: 7(a) terms, conditions and eligibility
- SBA: 504 loans
- SBA: Microloans
- SBA: Small businesses now eligible for $10 million in SBA financing
- SBA Information Notice 5000-880695: Issuance of SOP 50 10 8.1
- SBA: Franchise Directory
- Federal Reserve: Selected interest rates (H.15)
About this page. Written by Ezra Cabrera, Content Team Lead at SMB Compass. Figures were checked against the primary sources listed above on September 21, 2026; lenders change their terms, so confirm current terms before you apply, and let us know if you spot a figure that has changed. SMB Compass is a business financing broker: we don’t lend our own money, and we are paid by the lenders we place loans with. This page is general information, not financial, legal or tax advice.