Loan Guidelines for Restaurant Financing
Pre-qualifying Criteria:
- Management must have at least five (5) years of experience operating a restaurant of similar size and type to the one being financed.
- No start-up restaurants will be considered.
- Restaurant must be one that has sustainability and is not dependent on a "name chef" or "food fad" of the year. Acceptable examples include Thai restaurants, neighborhood family restaurants, highway accessible diners, etc.
- Restaurant must have at least three years of operating history with debt service coverage of at least 1.25x in the latest year, current interim period and at least one of the prior two years.
- Maximum LTV of 70%
Loan Size:
USDA: $250,000 - $5,000,000; SBA: $250,000 - $5,000,000
Eligible Locations:
East of the Mississippi
Loan Term Amortization:
USDA: Maximum 30 years; SBA: Maximum 25 years
Collateral:
First position mortgage as certified by title search and title policy on property. First security interest under UCC-1 on all business assets is generally required.
Loan Escrows:
The borrower may be required to contribute monthly to an escrow account for real estate taxes and property insurance.
Appraisal:
Complete summary appraisal required.
Environmental Screen or Phase 1:
Required
Eligible Principals:
U.S. citizens, or permanent resident aliens. Majority principal owners cannot be on probation or parole.
Recourse:
Every loan will be personally guaranteed by any shareholder with 20% or more ownership in the company.
