The real cash flow picture in food and hospitality
Anyone who has run a café or restaurant knows the numbers move every week. A wet month empties the courtyard. A road closure or a construction site out the front kills the morning trade. A beach-side café makes its year between December and Easter and then limps through winter. Meanwhile rent, wages, produce, coffee and power are paid every week or month whether customers turn up or not.
Then there are the big lumpy costs. A coffee machine or a cool room fails. The landlord wants a refurbishment as a condition of the new lease. Award wage increases land on 1 July. Super and PAYG catch up with you at BAS time. And when a good opportunity comes along, such as a second site or buying out the business next door, it never arrives with a bank-friendly timetable.
Where hospitality cash gets stuck
- Seasonal trading with quiet months that still carry full rent and staff
- Large one-off costs: equipment failure, fit-out, lease make-good
- ATO debt from PAYG withholding and GST built up over slow quarters
- Supplier accounts tightening up after late payments
- Opportunities like a second venue that need a deposit now
Café and restaurant scenarios
| Situation | How the loan is used | How it's repaid |
|---|---|---|
| Coastal café heading into winter with ATO and supplier arrears | Clears the ATO and suppliers so the business trades through to summer | Summer trading cash flow |
| Restaurant offered a lease renewal conditional on a refit | Funds the refit and new equipment | Refinance once the new lease is signed |
| Owner buying a second café with a short settlement window | Funds the purchase price and stock | Refinance to a longer-term lender |
| Kitchen fire or flood with insurance claim pending | Pays for repairs and keeps staff on while the claim is assessed | Insurance payout |
| Business partner wants out | Funds the buy-out of the departing partner's share | Refinance or sale of an investment property |
| Owner selling the restaurant, contract signed, settlement weeks away | Clears debts so the sale completes cleanly | Proceeds from the sale of the business |
These are examples of how hospitality owners can use a short-term loan. Every application is assessed on its own facts.
Why banks and cash flow lenders say no to hospitality
Many banks list hospitality as a sector they are cautious about. Expect a request for two years of financials, a business plan, a clean credit file and a valuation, then a wait of weeks or months for credit to decide. A bank refinance commonly takes up to three months or more, and the answer can still be smaller than you need.
Cash flow lenders read your bank statements. Hospitality statements show what you'd expect: strong summer months, weak winter months, lots of card settlements and big supplier payments. An automated assessment taken at the wrong time of year can make a healthy business look shaky. Many also take repayments daily, which drains a café's float. If you've been through that, our cash flow loan alternative page explains the difference.
How Equity Tap lends to cafés and restaurants
We look at three things: the property, the purpose and the exit. The security can be your home, an investment property or a commercial property, held by you or a related party. We can lend on a first mortgage, a second mortgage behind your existing lender, or a caveat.
We don't need your tax returns, BAS, profit and loss or bank statements, and we don't order a valuation before approval. That last point matters in hospitality. You can't easily leave service to meet a valuer, and you shouldn't have to.
The repayment structure suits seasonal trading. Interest for up to the first six months can be prepaid or added to the loan, so there are no scheduled payments while you get through the quiet months. Interest is not waived, and the full cost is shown to you before you go ahead. Terms run from one to twelve months, so you borrow for the window you need and no longer.
Exits that make sense for hospitality
- Peak season trading cash flow
- Sale of the business (see buying or selling a business fast)
- Insurance payout after an equipment failure, fire or flood
- Refinance to a bank once the new lease or second venue is bedded down
- Sale of an investment property
From first call to funds
Call us, or have your broker call. Tell us what the money is for, the property and the existing mortgage, and how it will be repaid. Conditional approval can often be given on the phone, with a term sheet in about 30 minutes once we have the scenario. We confirm the details, documents go out, and eligible loans can settle in as little as 24 hours.
Broker note
Hospitality is one of the sectors brokers find hardest to place with mainstream lenders. If your café or restaurant client has property equity, send the scenario through the broker page. You get an indicative answer fast, and we can bridge the client while you work on the long-term facility.
Running a licensed venue? See loans for pubs, bars and hotels, or franchise owners if you operate under a brand. To get started, apply online or call 1300 123 024.
Business-purpose lending only. Approval, timing and terms depend on the scenario.
Frequently asked questions
Will a bad winter quarter stop me getting a loan?
Can I borrow to fit out a new café?
Do I have to make payments during the quiet months?
Can you help me buy a second restaurant?
I owe the ATO from last year. Is that okay?
Do I need to own the café's premises?
How fast can a café owner get funds?
Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.