Financing program
Buildout and Expansion
Buildout financing funds the period between signing a lease and serving the first table, when construction, permits, and payroll all run ahead of revenue.
What is buildout and expansion for a food business?
Buildout financing funds construction, permits, leasehold improvements, furniture, and opening inventory for a new location or remodel. Draws can be tied to construction milestones so you are not paying interest on the full amount before the work is done.
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
Pick a state to see whether this program is offered there, and what changes if it is limited.
| Detail | |
|---|---|
| Typical amount | 50,000 to 2,000,000 |
| Term | 36 to 84 months |
| Time to funding | 1 to 4 weeks |
| Documents | Application, contractor bids, lease, financials |
| Cost structure | Fixed payment, often with a draw schedule |
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
Where it fits
- /Second locations
- /Patio and dining room remodels
- /Kitchen conversions
- /Franchise buildouts
How the program works
- /Covers construction, leasehold improvements, permits, furniture, and opening inventory.
- /Often structured alongside equipment financing so hardware and construction are separated.
- /Draw schedules can be aligned to construction milestones.
What it looks like in practice
A taqueria converts an adjacent retail bay into a 30 seat dining room.
A franchisee funds the buildout of unit 2 while unit 1 stays fully staffed.
Cost of capital calculator
Buildout payment and total cost, side by side
A buildout carries its financing long after the ribbon cutting, so the term choice matters more than the rate. Compare the payment the new location has to cover in month one against the total the project pays over its life.
Start from a common setup
Load a starting point, then edit any field in either column. Presets are examples, not offers.
Scenario A
Use the rate on a written offer, not an estimate.
Scenario B
Use the rate on a written offer, not an estimate.
Sensitivity: move one driver at a time
| Annual rate | Monthly payment | Change |
|---|---|---|
| 1.0% | $4,273.44 | -$84,890 |
| 15.8% | $6,046.36 | +$21,485 |
| 30.5% | $8,165.30 | +$148,622 |
| 45.3% | $10,574.56 | +$293,178 |
| 60.0% | $13,207.05 | +$451,127 |
| Term length | Monthly payment | Change |
|---|---|---|
| 36 months | $8,423.49 | -$38,051 |
| 48 months | $6,706.87 | -$19,366 |
| 60 months | $5,688.27 | — |
| 84 months | $4,547.99 | +$40,735 |
| 120 months | $3,732.77 | +$106,636 |
| 180 months | $3,163.11 | +$228,063 |
Change is measured against total cost of financing in the scenario the sliders control. Moving a slider edits that column, so the side-by-side updates with it.
Side by side
Scenario A costs $106,636 less on total cost of financing.
The arithmetic
payment = P x i / (1 - (1 + i)^-n), i is the annual rate divided by 12, n is the number of monthly payments. Total cost = (payment x n) - P.
Sources
- 1Amortizing payment formula: P x i / (1 - (1 + i)^-n)Standard time value of money identity. The same closed form used by the PMT function, with i as the monthly rate and n as the number of monthly payments.
- 2Buildout allocation model: construction 45 percent, equipment 25, mechanical 12, FF&E 10, soft costs 8Foody Finance modeled assumption (modeled assumption, not a published figure). Our own allocation for a second generation restaurant project, published in the buildout cost guide. It is a planning assumption, not a published statistic, and every project moves the mix.
- 3Bank prime loan rate, the base most business term financing is priced againstFederal Reserve, H.15 Selected Interest Rates. Published daily by the Federal Reserve. Enter the current prime rate when pricing a variable rate offer.
Education only: this calculator runs your own inputs through published arithmetic so you can compare buildout and expansion scenarios before you talk to anyone. It is not a quote, a promise to lend, an approval, or an indication of offers to come. Real terms come from a funding partner in writing after underwriting.
Availability: Program availability varies by state, and not every program is offered everywhere we operate.
Compare all 6 programs
How buildout and expansion compares against every other program on amount, term, speed, cost structure, and what underwriting expects. Compare total dollars repaid rather than the monthly payment.
| Typical amount | Term | Time to funding | Cost structure | |
|---|---|---|---|---|
| Equipment Financing | 5,000 to 500,000 | 24 to 84 months | 1 to 5 business days | Fixed monthly payment |
| Working Capital | 10,000 to 500,000 | 3 to 18 months | 1 to 3 business days | Fixed daily, weekly, or monthly payment |
| SBA Loans | 50,000 to 5,000,000 | 10 to 25 years | 3 to 12 weeks | Amortized interest, lowest payment of any program |
| Business Line of Credit | 10,000 to 250,000 | Revolving, reviewed periodically | 2 to 7 business days | Interest on the drawn balance only |
| Merchant Cash Advance | 5,000 to 250,000 | Repaid as card volume arrives | 1 to 3 business days | Factor rate, highest total cost |
| Buildout and Expansion | 50,000 to 2,000,000 | 36 to 84 months | 1 to 4 weeks | Fixed payment, often with a draw schedule |
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
| Time in business | Credit | Revenue | Collateral | |
|---|---|---|---|---|
| Equipment Financing | Month 1 with a down payment, common by month 6 | Options below 600, best terms above 700 | No minimum when the quote and asset are strong | The equipment itself |
| Working Capital | 6 months of deposits | Options below 600, pricing improves above 650 | About 15,000 per month in deposits | General business lien, no specific asset |
| SBA Loans | 2 or more years, exceptions for acquisitions | 660 and above with clean recent history | Documented profit and debt service coverage | Business assets, often real estate, plus a personal guarantee |
| Business Line of Credit | 12 months | 650 and above for most limits | Consistent monthly deposits across 12 months | General business lien |
| Merchant Cash Advance | 4 to 6 months of card processing history | Options in the low 500s | About 10,000 per month in card volume | Future card receivables |
| Buildout and Expansion | 12 months, or a funded project with an executed lease | 650 and above for most structures | Sized to the project and the operator contribution | The project, with 10 to 30 percent operator contribution |
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval. See source and method.
Every request
- /Completed program application with ownership details
- /3 to 6 months of business bank statements
- /Time in business and entity details
Equipment and buildout
- /Vendor quote including delivery, installation, and freight
- /Contractor bids and the draw schedule on construction
- /Executed lease for the space
SBA and conventional term
- /3 years of business and personal tax returns
- /Interim profit and loss statement and balance sheet
- /Debt schedule and personal financial statement
- /Purchase agreement and seller financials on an acquisition
Buildout and Expansion by business type
Guides and calculators for buildout and expansion
Buildout and Expansion questions
What does buildout financing cover?
Construction and leasehold improvements, permits and architectural fees, hoods and ventilation, furniture, signage, and opening inventory and payroll.
How much does a restaurant buildout cost?
Second generation space with an existing kitchen commonly runs 150,000 to 400,000. A bare shell can exceed 1,000,000 once hood, grease, gas, and electrical work is included.
Can I get funding before the lease is signed?
Preliminary approval is possible, but final terms usually require the executed lease and contractor bids.
Should equipment be financed separately?
Usually yes. Equipment carries longer terms at lower cost when it is financed against the asset instead of bundled into construction.
How are funds released?
Often on a draw schedule tied to construction milestones, so interest accrues on what has actually been used.