Restaurant Mortgages

We assist borrowers with specialist commercial mortgages for restaurants, supporting the purchase, refinance, or refurbishment of food and hospitality premises. Restaurant mortgages are tailored to the operational nature of the sector, providing funding that reflects trading performance rather than relying solely on property value.

Commercial mortgages for restaurants are typically available at up to 75% loan-to-value (LTV), allowing operators to retain working capital while investing in their premises.

Affordability and EBITDA-Based Lending

Restaurant lending is primarily assessed on the operating performance of the business, with lenders focusing on EBITDA as a measure of sustainable cash flow. Rather than applying simple income multiples, lenders use a Debt Service Coverage Ratio (DSCR), usually requiring EBITDA to cover annual mortgage repayments by 1.25× to 2.0× once interest rates are stress-tested.

This approach allows lenders to assess the true earnings potential of the restaurant, stripping out variable costs and accounting adjustments, and ensures the business can service debt through different trading cycles.

Key Underwriting Considerations

When arranging a restaurant mortgage, lenders will closely review:

• Business plans, including concept, positioning, and competitive landscape
• Historic accounts and financial projections, demonstrating cost control and margin sustainability
• Operator experience, particularly in similar restaurant formats
• Location and demographics, as footfall, local demand, and competition materially affect risk

Strong trading history, experienced management, and a well-defined concept significantly improve lender appetite and terms.

How We Help

Restaurant lending criteria varies widely between lenders, particularly around cuisine type, trading hours, alcohol sales, and operator experience. As a whole-of-market commercial mortgage broker, we assist by:

• Identifying lenders with genuine appetite for restaurant businesses
• Structuring cases around EBITDA and DSCR requirements
• Managing valuation approach and underwriting presentation
• Securing competitive terms aligned with long-term sustainability

A restaurant commercial mortgage can be a powerful tool to support growth, upgrade facilities, or secure long-term premises, provided the finance is structured around realistic cash flow and lender expectations.