Can You Get Restaurant Loans with Bad Credit?

The answer to “can you get restaurant loans with bad credit?” depends on who you ask. Banks will say no, because it’s risky for them. But banks have slapped the “risk” label on many of National Business Capital’s most successful restaurants that they fund. So, NBC doesn’t equate bad credit with “risk.”

NBC sees funding small businesses with low FICO as providing an opportunity for restaurant owners that wouldn’t have gotten the financing they needed to grow otherwise. So go ahead, discover what happens when a restaurant business owner with anything less than a perfect credit score asks a bank for restaurant business loans, vs. a small business financing company:

Ask a Bank:

The answer is more often than not simply “no.” Banks are reluctant to approve business loans for restaurants in the first place, given how volatile the industry can be (e.g. complex supply chain, high overhead, tenuous profit margins), and also because they make more money by going upstream and serving large enterprises.

Ask a Small Business Financing Company:

Ask an alternative small business financing National Business Capital team if you can get restaurant loans with bad credit, the answer is categorically different: yes you can.

What’s more, NBC can approve your restaurant for financing even if you have a past discharged bankruptcy (either personal or associated with your business), or an active tax lien!

Of course, given that restaurant owners are savvy — which means they possess a healthy dose of skepticism — this begs the question:

“Why does NBC offer restaurant loans for borrowers with bad credit, when banks often won’t even review an application if personal and business credit scores don’t meet a high threshold?”

In other words: “Isn’t NBC taking a risk?” There are answers this:

3 Reasons NBC Offers Restaurant Loans for Bad Credit Borrowers

1. Every loan — regardless of to whom it is offered, and whether they have stellar credit, good credit, impaired credit, or outright bad credit — is a risk; and it should be. Lenders who aren’t comfortable with risks have no business being in the industry.

Frankly, if it weren’t for certain subsidized advantages, most banks subject to the same “free market dynamics” as restaurants would have been out of business decades ago.

2. Like an overwhelming number of business experts — i.e. people who actually know how to start and run successful businesses, and not bank loan officers who may have never even launched a lemonade stand — we don’t believe that credit scores are indicative of a borrower’s total credit worthiness

Yes, it is a factor; but it is certainly not the only one.Believing otherwise isn’t just unfair, but it’s also unjustified. The evidence simply doesn’t back up the position. Borrowers with outstanding credit default on loans all the time, while those with bad credit (and very bad credit!) fulfill 100 percent of their loan obligations; sometimes even paying their obligation off early.

3. Most importantly: NBC is much more interested in what a restaurant owner is doing now, than what they might have done in the past.  

We are building lending partnerships that unfold and come to fruition in the FUTURE — not in the PAST. (But then again, banks have always been anachronistic and past-oriented, so their stance here is hardly surprising.)

Get Your Restaurant Business Loan Today

If you are in the market for restaurant loans with bad credit,  fill out our 1-minute application. Or, call (877) 482-3008 to speak with an expert business financing advisor, and ask which restaurant loan for bad credit borrowers is right for you! 

Not only is it quick and easy to complete, but you will receive a funding decision within 24 hours! At National Business Capital, we have supported restaurant owners across the country, and would be honored to play a role in your success story.

 

When Banks Say “No”

If you’ve reached out to a bank to get your restaurant loan with bad credit and they’ve said “no”, you might be worried about your next steps. That’s why we’ve written an eBook detailing why banks turn down loans and funding options still available to you. Download it now:

About the Author, Megan Capobianco
Megan Capobianco is the Marketing Manager at National Business Capital. Megan is passionate about helping business owners along their journey - providing them with relevant content they can use in their day-to-day operations.