Fairleaf Commercial Capital, a small-business funding broker in Spartanburg, SC, explains how to fund a restaurant opening by splitting the budget into four buckets: build-out, kitchen and dining equipment, opening stock, and cash for the first months. Each bucket fits a different structure, and permits come before any of them. Fairleaf is a broker, not a lender.
Spartanburg County, SC restaurants in numbers
Spartanburg County had 548 restaurants and other eating places with paid staff in 2023, employing 11,441 people (U.S. Census Bureau, County Business Patterns 2023). Only 21.4% of them had fewer than five employees, which tells you something about opening one: even a modest dining room usually starts with a payroll, not just the owner. Another 192 eating places operated with no paid employees in 2024 (U.S. Census Bureau, Nonemployer Statistics 2024), a Nonemployer Statistics tally kept apart from the CBP employer count.
Permits and zoning come first
Before any money is committed, confirm that the space can legally become a restaurant and what it will take. A former retail unit may need a hood, grease management, more restrooms or a change-of-use review. Whether the city or the county handles that depends on the address. The Spartanburg, SC zoning and building permit guide sets out the sequence, and partners will want to see that you have followed it.
Bucket 1: the build-out
Walls, plumbing, electrical, ventilation, finishes and fixtures that stay with the space are build-out costs. They have no resale value of their own, so they are usually funded with a term loan repaid over several years. Ask your landlord whether they will contribute an allowance toward the build-out; any landlord money reduces what you need to borrow, and partners will ask about it.
Bucket 2: kitchen and dining equipment
Hoods, ovens, fryers, walk-in coolers, dish machines, furniture and the point-of-sale system can usually be financed separately with equipment financing, where the equipment secures the deal. Because the collateral is clear, partners can often finance equipment for a new restaurant more readily than the build-out. Ask whether installation and electrical work are included in the financed amount; for a hood or a walk-in cooler, those costs can be significant.
Bucket 3: opening stock and smallwares
Food, beverage, paper goods, pans, utensils and uniforms are small individually but add up. They are usually paid from the owner's contribution or from working capital, because stock that turns over in days is not practical collateral.
Bucket 4: the first months of operating cash
Payroll, rent and food costs start before sales settle into a pattern. Plan a reserve that covers fixed costs until sales settle into a pattern. That reserve can come from the owner, from working capital financing, or from a line of credit once the restaurant has some history. Be cautious about using a merchant cash advance for opening cash: a merchant cash advance is not a loan, and its daily collection starts immediately, before the restaurant has a sales pattern.
What partners look for in an opening
- The owner's restaurant experience, because there is no sales history yet.
- The signed lease, its term and any landlord contribution.
- Itemized quotes for the build-out and the equipment.
- How much of the total the owner is putting in.
The restaurant financing page covers established restaurants as well as openings, and more articles are on the Fairleaf blog.
By Fairleaf Commercial Capital ยท Updated