Pinecroft Funding Group, a small-business funding broker in San Marcos, TX, explains how to finance a restaurant renovation: split kitchen equipment from construction work, plan for payroll during any closure, and bring partners a bid, a lease and a schedule. Hays County food service employers average about 26 staff each, so closure costs matter (Census CBP 2023).
Why renovation hits restaurants hard
Hays County had 530 food service and drinking place employer establishments in 2023 with 13,587 paid employees, about 26 per location, and only 133 of them had fewer than five staff (U.S. Census Bureau, County Business Patterns 2023). In the office ZIP, 78666, there were 279 accommodation and food service establishments, and just 22.6 percent were that small (U.S. Census Bureau, ZIP Code Business Patterns 2023).
Those numbers describe the problem. A restaurant with two dozen employees cannot simply pause payroll for a month while the kitchen is rebuilt, and a cook who finds another job may not come back. A renovation plan has to fund the work and the business around it.
Split the project into three parts
| Part | Examples | How it is usually funded |
|---|---|---|
| Equipment | Range, hood, walk-in, dish machine, POS | Equipment financing, secured by the equipment |
| Construction | Walls, floors, plumbing, electrical, grease handling, finishes | A term loan or a landlord allowance |
| Running costs during the work | Payroll, rent, utilities, restocking before reopening | Working capital or a credit line, sized to the closure |
Keeping them separate does two things. Each part gets a structure that suits it, and a partner can see that equipment is secured by equipment rather than mixed into an unsecured loan.
Financing a commercial kitchen remodel
Kitchen work is where costs run over. Before you request funding, have a contractor's bid that names the scope, the permits it assumes and the schedule, plus the equipment list with model numbers. If the hood, grease handling or electrical service has to change, those items can drive both the cost and the inspection schedule. The San Marcos, TX permit checklist lists the questions to put to the city first.
Close fully or remodel in stages?
A full closure is faster and often cheaper to build, but every week of it is a week of rent and, unless staff are let go, payroll with no sales. A staged remodel, such as the dining room first and the kitchen during slow hours, keeps revenue coming in but takes longer and costs more in labor. Work out the payroll and fixed costs of each option and put that number in the funding request; partners would rather see a realistic closure budget than a renovation that runs out of cash the week before reopening.
If you lease, the landlord is part of the plan
Most leases require the landlord's written consent before structural, plumbing or exterior work. Some landlords contribute an allowance; others require you to restore the space at the end of the lease. Check before you design anything, and read the lease questions post if a new lease is part of the move.
What partners will ask for
- The contractor's bid and schedule
- The equipment list and quotes
- Recent bank statements plus the card processor's monthly reports
- Tax returns and a recent profit and loss statement
- The lease, with its remaining term and landlord consent
Restaurant financing covers the rest of a restaurant's funding options. Local figures are on our San Marcos, TX page, and more posts are on the blog.
By Pinecroft Funding Group ยท Updated