The answer to “can you get restaurant loans with bad credit?” depends on who you ask.

If your inquiry is made to a bank, then the answer is a definitive 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.

However, if you ask the National Business Capital team if you can get restaurant loans with bad credit, our answer is categorically different: yes you can. What’s more, we may even be able to approve your loan 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 do we 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: aren’t we taking a risk? Yes. And there are three reasons for this:

  • First, 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.
  • Second, 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.
  • Third, and most importantly: we are much more interested in what a restaurant owner is doing now, than what they might have done in the past. After all, we are not in the time machine business. 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.)

The Bottom Line

If you are in the market for restaurant loans with bad credit, then we invite you to fill out our two minute application. 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!

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: