Whether it’s a popular chain eatery serving much-loved classics or an independent restaurant that offers a unique dining experience, the UK has a rich history of culinary venues that offer every meal you can think of, from cultural specialities to easy grub for families.
It’s an age-old industry that’s growing well, with research from Statista showing that the UK restaurant market is forecast to rise to 19.5 billion pounds by 2026.
But restauranteurs face unique financial pressures. Inflation can quickly hit supply costs, the state of the economy weighs down on customers’ disposable income, and the fiercely competitive nature of the industry can make it very challenging to keep things profitable. Even poor weather can be devastating if it comes during an all-important peak season.
For those looking to start a new business, the initial setup costs can also seem quite daunting, with expenses like designing and building as well as equipping your restaurant to think of a few.
Luckily, there are funding options available. In this article, we explain how restaurant owners can secure a loan or other finance solutions to open a new eatery or invest in their existing culinary business.
Business Loans for restaurants
When looking for extra cash, restauranteurs often start by looking at securing a Business Loan.
Loans are a flexible option for securing funds because they can be used however you want. The money is paid straight into your bank account and can be spent on everything from stocking up on supplies, ingredients and beverages to paying for a brand new website with an easy-to-use reservation system.
Repayments are typically made every month with a manageable fixed instalments but if your restaurant gets busier during the holidays, it’s possible to arrange for seasonal repayments during these busy periods.
Equipment Finance for restaurants
Restaurants need all sorts of specialist equipment, not just an oven! Even for smaller restaurants, the costs of everything you need for cooking meals, storing supplies and hosting your guests can soon add up.
Equipment Finance (also known as Asset Finance) is a tailored form of finance that can cover all of your culinary and dining purchases, including:
- Ovens
- Deep fryers
- Microwaves
- Refrigeration units
- Freezers
- Prep tables
- Dishwashers
- Sinks
- Plates, bowls and cutlery
- Glassware
- Serving trays
- POS (point-of-sale) systems
- Seating and tables
- Safety equipment
- Uniforms
- Security alarms
- Computers
- Inventory management software
Equipment Finance for restaurants usually covers the purchase, delivery and installation of virtually any item you can think of for your eatery, large or small. Repayments are made as manageable monthly instalments spread out over an agreed term, which is often several years.
Fit Out Finance for restaurants
A restaurant’s look and feel is almost as important as the food itself, helping to create a relaxing and sociable atmosphere where people can unwind to enjoy their meals.
Fit Out Finance for restaurants provides funding to create the perfect decor and atmosphere for dining, including the purchase and installation of:
- Cooking stations
- Bar counters
- Prep areas
- Storage areas
- HVAC systems
- Signage
- Lighting
- Flooring
- Wall coverings
- Artwork
- Other decorative features
In other words, you can fund any tangible or intangible asset needed to make your restaurant look and feel exactly how you want it. Like Equipment Finance, Fit Out Finance is repaid in fixed monthly instalments.
Refinance for restaurants
Restaurants are often filled with expensive equipment, from top-of-the-range commercial ovens to specialised catering refrigeration units.
Machinery and equipment are valuable business assets and, through Refinance, they can be leveraged to release around 80% of the asset’s value back into your business. This produces a cash boost without the need to apply for a more traditional Business Loan, which can sometimes be harder to secure.
The debt is secured against the restaurant equipment that’s being refinanced, which is paid back through monthly instalments. These instalments come in the form of regular fixed cost that won’t be affected by changing interest rates or inflation. You can even consolidate existing finance arrangements through refinance, potentially allowing you to secure more favourable repayment terms.
Finance for opening a new restaurant
Many entrepreneurs and culinary enthusiasts harbour the ambition of opening their very own restaurant, whether that’s an independent restaurant catering to diners looking for a unique gourmet experience or an existing franchise with an established reputation and business support.
Aside from applying for a Business Loan, there are two options that are tailored to support those looking to start their own restaurant: New Start Finance and Franchise Finance.
New Start Finance for restaurants
New Start Finance provides everything you’ll need to get your restaurant started, including catering and dining equipment and fit out expenses. It can also provide an initial sum of working capital to help fund things like your initial food and drink inventory, licensing payments, as well as hiring chefs, servers and other eatery support staff.
Franchise Finance for restaurants
Franchise Finance is like New Start Finance, except that it’s a tailored package to cover various franchise-specific costs like franchise fees along with the usual equipment purchases, fit out expenses and operational fees.
You can find out more by reading our guide to Franchise Finance.
How Origin Finance can help
At Origin Finance, we’re passionate about helping businesses succeed.
We have years of experience supporting the hospitality industry and helping entrepreneurs secure the funding they need. As a broker, we have access to lenders that only consider introduced applications, and some who specialise in lending to restaurant owners.
We’ll also help put your finance application together, maximising your approval chances. We do not charge a fee for our services as we are directly renumerated by the lender.
Get in touch for a free, no-obligation quote to find out how we can help secure finance for your restaurant.
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