6 Steps to Buy a Restaurant With Investors in 2026
by Raises.com
This article is general information, not legal, tax, securities or investment advice. Laws, rates and programs change, and the details here may no longer be current. Confirm anything you plan to act on with your own counsel and accountant.
Buy a restaurant with investors by proving the cash flow on paper, getting the landlord to consent to the lease assignment, and moving any liquor license before you close. Lenders treat a restaurant as one of the hardest small businesses to finance. Margins are thin. The value leans on one operator and one lease, so show investors that risk plainly and structure around it.
Neither client file in this post is a restaurant. Cody Sechelski worked with Raises.com® on the capital structure and lender sourcing for the first acquisition in his Texas HVAC roll-up, a profitable, family-run business. Hannah Dowty of Sovereignty Enterprise worked with the same team. A restaurant is a harder credit than an HVAC company.
1. Read the restaurant the way a lender does
A lender looks at a restaurant and sees three thin layers holding each other up, the margin, the operator and the lease, and a crack in any one reaches the other two. Food and payroll are paid as you go. A slow month shows up in the bank account almost at once.
The equipment is the other problem. A used hood, a walk-in cooler and a range line bring little at auction, which leaves the loan resting on cash flow and on whoever runs the kitchen. Some lenders decline on the word restaurant alone. The ones who say yes want a cleaner file than they would ask of a plumbing company.
2. Make the financials agree with each other
Cody Sechelski's test for the deals that close starts with clean financials that agree with each other. For a restaurant that means the point-of-sale reports, the bank deposits, the sales tax filings and the tax returns all show the same sales. When they disagree, the lender underwrites the tax return.
Some sellers say the real sales are higher than the returns show, because cash never reached the books. You cannot buy that number. A lender will not lend on it, investors should not price it, and paying for it means paying the seller for income they told the government they never earned. Price the restaurant on what was reported.
3. Pass the key-man test
The second part of Cody's test is a business that survives the key-man test. In a restaurant the key man is often the chef, or the owner working the door, and the regulars, the recipes and the kitchen staff can follow that person out. Ask who runs the line on the first Monday after closing. Get the answer in writing.
Lenders and investors want a seller who stays through a transition, recipes written down, and a sous chef or general manager committed to staying. Cody's deal used seller participation. A seller still owed money has a reason to answer the phone after the wire.
4. Get the landlord's consent to assign the lease
Most restaurant leases cannot be assigned without the landlord's consent, so the landlord is a party to your deal from the day you sign the LOI. Read the assignment clause first. Expect the landlord to ask for your financial statements and to want you to sign personally for the rent. If you buy the seller's company instead of its assets, check the change-of-control language too.
Then check the term. Your lender and your investors will usually want the lease, renewal options included, to run at least as long as the loan. A restaurant that moves is a new restaurant. It starts over with a new build-out and none of the old foot traffic.
5. Move the liquor license, where there is one
A liquor license belongs to its licensee, and the state or county that licenses it decides whether a new owner can take it over. Ask the licensing office what it needs and how long approval takes. Then make that approval a condition of closing. A restaurant bought without its license is a different business.
The health permit often works the same way. In many places it is issued to the operator, so plan to apply to the local health department in your own name before you take the keys.
6. Build the stack around the operator
An SBA 7(a) loan fits a restaurant the buyer will run, up to the program's $5 million cap. SBA rules at 13 CFR 120.160 generally require anyone owning 20% or more of the borrower to sign personally for the loan, so many sponsors keep each passive investor under that line. Seller participation fills part of the gap. Investor equity in an SPV fills the rest.
Cody's capital came from a tournament across multiple capital firms, through months of moving goalposts, and the final lender quoted three weeks and took two. His seller stayed, because the structure and the story held. He booked his first call in October 2025 and closed roughly seven months later. Tell your seller to expect months.
What investors ask about a restaurant
Investors ask who runs the kitchen, what happens to their money in a bad quarter, and when they get paid. Answer with the unflattering version. Hannah Dowty said what she valued in the team was honesty, setting appropriate expectations rather than overselling. Hold your restaurant pitch to that standard.
Put the bad case in the model. Show what a drop in sales does to the loan payment and to distributions, and say in the PPM which one gets paid first. In a restaurant the lender is paid before any investor sees a dollar.
Restaurant vs trades business: what a lender reads
| Lender question | Restaurant | Trades business (HVAC, plumbing) |
|---|---|---|
| What is the collateral worth? | Kitchen equipment with little resale value | Trucks, tools and receivables |
| How tied is it to one address? | The lease is the business | Crews drive to the customer |
| Who holds the customers? | Often the chef or the owner | Often the owner, sometimes service contracts |
| What license has to move? | A liquor license, where one exists, licensed by the state or county | Trade licenses, often held by a named person |
| What does the landlord control? | Consent to assign the lease | Usually a shop or yard lease that is easier to replace |
Frequently asked questions
Can I use an SBA loan to buy a restaurant?
Yes, restaurants can qualify for SBA 7(a) loans up to the $5 million program cap. The lender will want you, or a manager you hire, to have run a restaurant before. Expect to sign personally if you own 20% or more.
Does the lease transfer when I buy a restaurant?
Only with the landlord's consent, if the lease requires it, and most do. Many leases also treat a sale of the tenant company as an assignment. Start that conversation early.
How does a liquor license transfer in a restaurant sale?
Through the state or county that licenses it, which reviews you as the new owner. Ask that office for its requirements and timing before you sign, and make its approval a condition of closing.
What financials should I get from the seller?
The tax returns, the monthly profit and loss statements, the point-of-sale sales reports, the bank statements and the sales tax filings. They should show the same sales. Where they differ, the tax return wins.
Can investors own a restaurant without working in it?
Yes, through an SPV that owns the restaurant while you or a hired manager runs it. The investors hold units under the operating agreement and take no part in daily operations.
Raises.com® builds the structure behind the purchase: the PPM, the subscription and operating agreements, CFA financial proformas and the data room. That makes the raise legally and financially sound from the first read. See how acquisition capital gets structured at https://raises.com/buy-a-business, or book a strategy call at https://raises.com/call.
General information, not legal, tax, securities or investment advice. Laws, rates and programs change, and the details here may no longer be current. Confirm anything you plan to act on with your own counsel and accountant.