Restaurant bridge loans
Last updated
A restaurant bridge loan is short-term, asset-based financing secured by a restaurant or bar property, used to acquire, refinance or reposition the real estate before longer-term financing. Lenders size it off the appraised value of the building and land, with attention to whether a tenant or the owner operates the business and how easily the space could be re-leased. It is common for owner-operators buying their building and investors buying leased restaurant properties.
Compare restaurant bridge lenders for your deal
Enter your deal once and compare every asset-based lender whose rules fit it, side by side: max loan, rate, points, term, days to close and total cost. Lenders stay anonymous until one confirms your terms.
- Free for borrowers
- No credit pull to compare
- Loans from $1M to $50M
What lenders look at
Second-generation buildout
A space with existing hood, grease trap, walk-ins and plumbing is easier to re-lease to another operator, which lenders treat as a real advantage in a downside scenario.
Liquor license
For bars and full-service restaurants, the license type, whether it transfers with the property or the business, and any local restrictions affect value and the exit.
Tenant vs owner-operator
A building leased to an established restaurant tenant is underwritten on the lease term and tenant strength. An owner-operated property is underwritten more on the real estate and the operator.
Alternative use
Lenders look at whether the building could become retail, office or another use if restaurants fail at the site, especially for freestanding pads.
Location and visibility
Pad sites, drive-thru access, parking and nearby traffic generators drive the value of restaurant real estate.
How leverage works
Restaurant real estate is usually treated as higher risk than multifamily because restaurants turn over often, so asset-based bridge lenders tend to offer lower leverage, often in the 50–65% of as-is value range. A freestanding building with a drive-thru, a second-generation buildout and a long lease to an established operator generally earns better terms than a single-tenant space with a new concept. Lenders lend on the real estate, not the restaurant business, so equipment and goodwill typically do not add to loan size. When there is a remodel or conversion, some lenders size on loan-to-cost and hold back renovation funds.
Use the commercial bridge loan sizer to see whether LTV or LTC decides your loan. The deal form asks for square feet, occupancy today and current NOI, so lenders see the numbers they size on.
Documents lenders ask for
- Lease agreement and tenant financials, or operator P&L if owner-operated
- Trailing 12-month and prior two years of property operating statements
- Liquor license details and transfer status, if applicable
- Purchase contract or payoff letter
- Equipment list and note of what conveys with the real estate
- Site plan, survey and photos
- Renovation budget and contractor bids, if applicable
- Entity documents and sponsor schedule of real estate
How fast it closes
Simple restaurant real estate deals can close in roughly 7–30 days. Timing is usually driven by the appraisal, lease review and, for bars, any license transfer or local approval. Owner-operator deals that are also transferring a business may take longer if permits and licenses must be reissued.
Common bridge scenarios
Owner-operator buys the building
A restaurant owner buys the building they lease and uses a bridge loan until an SBA 504 or 7(a) loan closes.
Acquisition of a leased restaurant property
An investor buys a building leased to a restaurant tenant and needs to close quickly, then refinances with a bank loan.
Vacant restaurant repositioning
An investor buys a dark restaurant, updates it and re-leases it to a new operator, using a bridge loan through the vacancy.
Maturing loan payoff
A loan on restaurant real estate is maturing and the owner needs time to re-lease or refinance.
Typical exit
Restaurant bridge loans are usually repaid with an SBA 504 or 7(a) loan for owner-operators, a bank loan once a lease is in place, or a sale of the property.
Related
- Asset-Based Commercial Real Estate Loans
- No-Credit-Check Commercial Bridge Loans
- Fast-Close Commercial Bridge Loans: 7, 14 and 21 Days
- Commercial bridge loan sizer (LTV and LTC)
- Debt yield and DSCR calculator
- Bridge loan cost calculator
More specialty: Gas station · Auto property · Healthcare and skilled nursing · Daycare and private school · Church · Event venue and recreation · Parking · Cannabis property · Commercial land
Frequently asked questions
Can I get a restaurant bridge loan without a credit check?
Some asset-based lenders size off the property and do not pull credit, usually at lower leverage. You can filter for them when you compare lenders.
How fast can a restaurant bridge loan close?
Simple deals can close in about 7–30 days. Liquor license transfers and tenant lease reviews are the common reasons for a longer timeline.
How much leverage can I get on a restaurant property?
Expect lower leverage than multifamily, often in the 50–65% of as-is value range at asset-based lenders. A long lease to an established tenant usually helps.
Will a lender finance a vacant restaurant?
Some will, sizing the loan on as-is value with a plan to re-lease. A second-generation buildout and a strong location make the deal easier to place.
Does the liquor license count toward value?
Usually not for an asset-based lender, which lends on the real estate. The license still matters because it affects the tenant’s business and the property’s appeal to the next operator.
General information for business-purpose investors, not legal, tax or financial advice. Lenders set final terms after underwriting.