Funding a restaurant renovation in Appleton, WI usually means matching three costs to three tools: a term loan for the build-out, equipment financing for the kitchen, and working capital for downtime. Bellgrove Lenders, a small-business funding broker in Appleton, Wisconsin, explains each, and why a merchant cash advance is not a loan. Partners decide and set terms.
The local restaurant picture
Outagamie County had 469 food service and drinking place employers in 2023, including 354 restaurants and other eating places (U.S. Census Bureau, County Business Patterns 2023). Only 16.9 percent of those restaurants had fewer than five employees, and the food service group as a whole employed 8,251 people. In the office ZIP, 54911, accommodation and food services was the second-largest sector, with 139 employer establishments (U.S. Census Bureau, ZIP Code Business Patterns 2023).
A staffed kitchen is the important point for a remodel. When the doors close for construction, payroll decisions follow immediately.
Six cost buckets
- Design and permits: drawings, permit fees and any approvals for changes to the space.
- Construction: walls, flooring, plumbing, electrical, ventilation and finishes.
- Kitchen equipment: ranges, ovens, hoods, refrigeration, dish machines.
- Dining room: seating, tables, lighting, the bar.
- Downtime: rent, insurance, loan payments and any staff kept on while closed.
- Reopening: food and beverage stock, training and marketing for the relaunch.
Get a written figure for each bucket before talking to anyone about funding. A remodel budgeted as one round number is the hardest kind to finance.
Match each bucket to a tool
| Cost | Option that often fits | Why |
|---|---|---|
| Construction and finishes | Term loan | A long-lived improvement repaid over years |
| Kitchen and dining equipment | Equipment financing | The equipment secures the deal |
| Downtime and reopening stock | Working capital | A short gap with a clear end date |
| Repairs that recur after reopening | Line of credit | Draw and repay as needed |
Many owners combine a term loan and equipment financing. Partners usually want the contractor's bid, equipment quotes with model numbers, recent card-processing and bank statements, and the lease.
Plan the closure as carefully as the construction
Every week closed is a week of fixed costs without sales. Ask the contractor for a schedule, add time for inspections before reopening, and decide in advance what happens to staff. Phasing the work, such as dining room first and kitchen second, can keep some revenue coming in, at the cost of a longer project.
If a merchant cash advance is offered
Card-heavy restaurants often receive advance offers during a remodel. A merchant cash advance is not a loan: a funder buys part of future card sales and collects it through a holdback or fixed debits, priced with a factor rate. Collection starts right away, while the renovation is still holding sales down. Compare the total it will collect, and how fast, with a term loan and equipment financing before accepting one.
Questions to settle with the landlord first
Before committing to a remodel, check the lease: how many years remain, whether the landlord must approve the plans, and who owns the improvements at the end. Funding a kitchen rebuild in a space with two years left on the lease is a very different decision from doing it with ten.
Where to go next
Restaurant financing covers equipment, credit lines and working capital in more detail, and other posts are on the blog.
By Bellgrove Lenders · Updated
