November 18, 2025

Finance

Funding Options for Restaurants and Hospitality

Q: Is a merchant cash advance a loan?

No. It is an advance against future card revenue with a fixed total to repay. Repayments are taken as a share of card sales and adjust with turnover.

Q: Can I get funding with seasonal revenue?

Yes. Lenders that understand hospitality will assess seasonality and may offer structures that flex with your takings, for example card based collections or interest only periods on certain facilities.

Q: What credit score do I need?

There is no single score. Lenders look at bank data, returned items, arrears, charge status, and trading history. Clean statements and stable income signals help you qualify for better pricing.

Q: What is the cheapest option?

For long term projects and predictable cash flow, a standard business loan or asset finance often has lower total cost. For short term working capital with variable weeks, an MCA or revolving credit can be more practical even if the headline cost is higher.

A practical guide to restaurant and hospitality finance in the UK. Compare MCAs, business loans, asset finance, VAT loans, and revolving credit.

Abdus-Samad Charles

Head of Content

TLDR

Restaurants, cafes, bars, takeaways, hotels, and catering firms often need fast, flexible working capital during menu changes, refurbishments, and peak seasons. The most used products are merchant cash advances that flex with card takings, short term unsecured business loans, equipment and fit out finance, VAT loans for quarter spikes, and revolving credit for topping up stock. Use Open Banking and clean statements to speed approval and improve terms.

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Common funding jobs in hospitality

Working capital

Cover staffing, suppliers, utility spikes, and delivery platform fees when cash in bank is thin.

Fit out and equipment

Ovens, coffee machines, POS, extraction, cold rooms, refurb and signage. Spread the cost over the asset life.

Seasonal stock

Build inventory ahead of peak weeks and repay from turnover without fixed monthly strain.

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Quick chooser, which product fits your scenario

Scenario	Best fit	Why it helps
Card heavy takings with variable weeks	Merchant Cash Advance	Repay as a share of card sales. Busy weeks clear more, quiet weeks repay less.
Refurb, kitchen upgrade, furniture	Asset Finance	Match repayment term to equipment life and keep cash free for operations.
VAT quarter arrives and cash is tight	VAT Loan	Spread the VAT bill so you avoid arrears and keep suppliers current.
Marketing push or menu launch	Unsecured Business Loan	Fixed term and fixed repayments for planned spend and predictable budgets.
Frequent small top ups for stock	Revolving Credit	Draw, repay, draw again within a limit. Pay interest on what you use.

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Product deep dives

Merchant Cash Advance

You receive a lump sum upfront, then repay as a fixed percentage of card sales until a pre agreed total is cleared. Pricing uses a factor rate that sets the total repayment. This flexes with takings, which suits card driven venues.

Typical use working capital, stock, minor refurb, delivery onboarding fees
Speed decisions in hours and funds in as little as one to two days when data is clean
Watch outs total cost can be higher than a standard loan, compare if you qualify for cheaper options

Unsecured Business Loan

Fixed term, fixed monthly payments. Good for planned projects, marketing, or extending runway. Rates depend on turnover, profitability, statements hygiene, and director history.

Typical use marketing, new site launch, kitchen upgrade deposits
Speed one to five days depending on paperwork and Open Banking
Watch outs fixed payments during slow months need planning

Asset Finance for equipment and fit out

Fund ovens, coffee machines, chillers, EPOS, extraction, and larger refurb items. Repay over the useful life to align cost with revenue.

Typical use kitchen line, front of house refurb, terrace furniture
Speed three to ten days depending on supplier quotes and valuation
Watch outs missed payments risk recovery of the asset

VAT Loans

Spread quarterly VAT so cash is available for payroll and suppliers. Often short terms from three to twelve months.

Typical use quarter spikes or HMRC Time To Pay bridging
Speed one to three days when accounts and VAT returns are available
Watch outs do not stack multiple short term loans without a clear plan

Revolving Credit

Flexible line for topping up stock and smoothing weekly swings. Draw down inside your limit and repay as trade recovers.

Typical use inventory, small repairs, ad campaigns
Speed set up in a few days, then instant draws to your account
Watch outs monitor utilisation and fees, keep a repayment rhythm

Eligibility checklist

Active UK trading entity with card or banked turnover
Three to six months of statements, clean and legible
Evidence of revenue stability or clear seasonality pattern
No unaddressed CCJs or recent returned items where possible
For asset deals, supplier quotes and serialised asset details

Documents that speed approval

Last three to six months business bank statements in PDF
Card processor statements or dashboard exports if using an MCA
Most recent filed accounts or management accounts

VAT returns if applying for a VAT loan
Photo ID and proof of address for directors
Supplier quotes for equipment and fit out items

Speed guide

Product	Typical decision	Typical payout
Merchant Cash Advance	Same day to 48 hours	1 to 3 business days
Unsecured Business Loan	24 to 72 hours	2 to 5 business days
Asset Finance	2 to 5 days	3 to 10 business days
VAT Loan	24 to 48 hours	1 to 3 business days
Revolving Credit	2 to 4 days	Same day after setup