Hospitality business loans for Kiwi cafés, restaurants and bars

What makes cash flow tricky in New Zealand hospitality?

Hospitality runs on thin margins and daily takings. When the tables are full, cash looks healthy. Then a wet week, a roadworks detour or the end of the tourist season hits, and fixed costs keep coming: rent, wages, power, suppliers and GST.

The real pressure points for Kiwi cafés, restaurants and bars:

• Seasonality: summer and holiday periods are busy in most centres, while winter can be lean, especially in beach and tourist towns.
• Public holidays: staff who work a public holiday earn premium pay and may be owed a day off in lieu, which lifts wage costs on some of your best trading days.
• Equipment failure: a dead espresso machine, chiller or combi oven stops trade immediately.
• Fit-outs and refurbs: new venues and tired interiors both need serious capital up front.
• Supplier terms: food and beverage suppliers want paying weekly or monthly, regardless of a slow patch.
• Tax: GST, PAYE and provisional tax can build up quickly when trading dips.

What do hospitality owners typically fund?

• A new venue fit-out or a refurbishment of an existing space
• Commercial kitchen equipment, coffee machines, chillers and furniture
• Working capital through the quiet season
• Buying an existing café, restaurant, bar or franchise
• A second site, outdoor seating area or extended kitchen
• Catch-up on GST or PAYE arrears
• Marketing, a menu relaunch or a function space upgrade

Which LoansOne options fit a hospitality business?

Pricing reflects your trading history, security, the loan term and what the money is for. Every loan is priced on your circumstances, and LoansOne works to get the sharpest rate available for your situation.

Illustrative example: a Wellington café

This is an illustrative scenario, not a real client.

A Wellington café near the waterfront trades strongly through summer and cruise season, but winter weekday trade drops off. The owner wants to refurbish the seating area and replace an ageing espresso machine before the next summer, and also wants a buffer for wages through the quiet months.

The bank asks for a full business plan and updated accounts, with a decision weeks away. The owner applies online instead. An expert reviews twelve months of bank statements showing consistent EFTPOS takings, and the café is matched to a lender offering an unsecured loan for the refurbishment and buffer, with the new machine considered on equipment finance. The refurb is finished before spring, ready for the busy months.

What do lenders look for in a hospitality application?

1. Daily takings: steady EFTPOS deposits on your bank statements carry real weight.
2. Lease: the term remaining and any renewal rights. A short lease limits how much you can sensibly borrow.
3. Location and trading history: how long the venue has traded and how it holds up through the year.
4. Your experience: owners who’ve run venues before present a lower risk.
5. Security: property equity opens up larger amounts and helps if credit is patchy.

Before applying, the loan readiness check shows what you have ready and what to gather.

How do you fund a hospitality fit-out?

A fit-out is usually the biggest cheque a hospitality owner writes, and it rarely comes in on budget. Splitting it by what each part is helps you fund it properly:

• Kitchen and bar equipment: ovens, fridges, dishwashers, coffee machines and ice machines hold value and suit equipment finance over their working life.
• Building work: walls, plumbing, extraction, flooring and joinery stay with the premises, so they’re usually funded with an unsecured loan or a property-backed loan.
• Furniture and fixtures: tables, chairs, lighting and signage sit somewhere in between.
• Opening costs: first stock, staff training, launch marketing and a cash buffer for the first few slow weeks.

Check the lease before you commit. Lenders want comfort that you’ll be trading in the space long enough to recoup the spend, and landlords sometimes contribute to fit-out costs in exchange for a longer term.

Buying a café, restaurant or bar: what changes?

Buying a going concern means lenders look at two things: the business you’re buying and you. Expect to be asked for the seller’s recent trading figures, the lease and any assignment terms, your hospitality background and what you’re putting in yourself. Goodwill on its own is hard to borrow against, so many buyers combine their own funds with a loan secured against their home, often a 2nd mortgage. Our page on business acquisition finance covers the process in more depth.

What if the bank has already said no?

A bank decline isn’t the end of the road for a hospitality business. Banks often apply sector-wide caution to cafés and restaurants, and they lean heavily on annual accounts that may be months out of date. Private lenders look at what’s happening now: your recent takings, your lease and your plans. If credit is the sticking point, property-backed lending can carry the application, because a 2nd mortgage doesn’t need cash flow or financial records. Our guide on what to do when the bank declined your business loan walks through the next steps.

How can a café or restaurant borrow wisely?

• Plan the winter buffer in autumn, not in July when the account is empty.
• Put long-life equipment on equipment finance and keep cash for stock and staff.
• Check the lease term before funding a big fit-out.
• Treat card-linked funding with care: it’s convenient, but compare the total cost against a term loan using the compare loan offers tool.

Next step

Whether it’s a fit-out, a failed oven or the winter gap, get your options moving now. Apply in about 30 seconds. It’s free, won’t mark your credit file, and an expert reviews every application before the right lender gets in touch. Or call 09-888 5252.