How to Finance a Restaurant Business in the UK

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Your labour of love needs a lot more planning and resources that you’d imagine. You may have read and applied all the steps needed to open a restaurant in London, but there is one key ingredient that requires further guidance.

This ingredient is finance. It is the key without which all locks remain closed and inaccessible. In an increasingly competitive world, there is a growing need to find ways for funding. If you’re seeking different ways to finance your restaurant in the UK, you’re at the correct place.

While there is no way to estimate exactly how much it costs to open a restaurant business, there are some ways you can figure out an almost accurate estimate for how much money you’ll need to get your business on its feet.

Things you need to Account for While Figuring Out the Costs

If you have a tentative list of things you may need to account for, then you need to think again. According to Sage.com, the average cost of opening a restaurant is $275,000. That is a lot of money just to get your dream restaurant up and running. 

This makes sense if you have a long list of items to account for. Some possible items you may need include a one-time cost or a recurring cost.
One-time costs may include paying for professional advice from an agent or a consultant before you can actually begin the real work for your business. Similarly, another such type of cost would be buying all the equipment you need. It may include kitchen tools, crockery and cutlery.

A recurring cost would include paying for utilities, rent if the place is not your own, marketing costs, and of course, paying employees.

Perhaps the highest cost you may incur during financing would be the money you spend on buying the raw materials and stacking the inventory for your restaurant.

Repair and maintenance also make up for recurring costs.

This list could go and on, but this is just supposed to give a general idea of what things to include when planning the finances for a restaurant business. Of course, it goes without saying that each restaurant business will have its own customized finances that differ from another business. It depends on the location, type of cuisine and the size of your restaurant.

But the problem of raising finances initially remains a tough one. So, what can you do to finance a restaurant business in the UK?

How to Finance a Restaurant Business in the UK

It is true that most businesses do not make profits in their first year of running. That is not something to worry about. With perseverance, many businesses keep on running despite this obstacle. This is mainly because they receive funding which allows them to stay afloat during their first year.


One of the best ways to securing funding is through loans. You take loans from banks, government grants or angel investors. In the UK, you can receive loans from:

  1. 1
    Start-up Loans: It is a type of government grant consisting of unsecured loans for individuals who are aspiring to grow their business in the UK. The minimum loan you receive is £500, which extends up to £25,000. If you have multiple businesses, you can get up to £100,000. The best part about this loan-granting body is that it offers a yearlong mentorship to successful candidates. Moreover, the loan repayment time is within 1- 5 years.
  2. 2
    Capify: This funding body offers loans to small businesses. It also offers three different categories to restaurant business owners. You can check your eligibility for:
  • Stock Ingredients
  • Furniture and Redecoration
  • Upgrade to Efficient Equipment

Capify boasts flexible payments and offers a simple applying process, which is usually done over the phone. It also gives out loan to those with bad credit history, but again, you need to get in touch with a Capify representative.


If you’re someone who does not want to take loans and fear repayment, an alternative source of financing is crowdfunding. Simply put, crowdfunding is when a large pool of people makes small contributions to your dream. Usually, crowdfunding is done via the Internet.

Kickstarter and Indiegogo are some online tools where you can crowdfund your restaurant business. You put up your pitch, convincing interested people to make a contribution. The people contributing have no stake in your business, but their contribution is rewarded.

In the UK, Crowdfunder is one of the most used crowdfunding sites. 

The Clove Club in Shoreditch, East London, is an example of a restaurant that obtained financing through crowdfunding. It raised £250,000 and went on to become one of the top 50 restaurants in the world. 

Pop-Up trial

If you’re unsure of your restaurant’s business idea, then you may take it for a test run. This is what pop-up restaurants aim to do. Having a weekly pop up in different parts of the city or whatever location you are operating in, you can get a taste of what it’s like to finance a restaurant. This will allow you to charge customers and accept payments while also testing your idea.

Need help in arranging a pop-up? London-based Grub Club can help you. If you’re a chef or a newbie with plenty of cooking skills but need a place to put them to use and make money, Grub Club is your go-to. 

With Grub Club, you can build a restaurant industry’s reputation and refine your restaurant’s menu. 

Final thoughts

The thought of financing a business on your own is scary. This is especially true for an industry such as hospitality as it has suffered due to the pandemic; it is a leap of faith. But predictions suggest that by 2024, the UK’s restaurant industry will recover losses incurred from the pandemic. While business may not be booming as per industry standards, just remember food never goes out of business. People, especially Londoners, cannot be stopped from dining out.

So, dig into the research, meet with people in the industry and get your spirits high because there are ways you can raise finances for your restaurant business. 

New eBook Reveals How To Successfully Open A Restaurant… Free E-Book!


About the Author

Massimo’s career has grown up through the restaurant world, starting as a waiter through to high-end restaurant openings within an operational management capacity. This depth of experience has allowed him to understand the business from both a guest’s needs to what a team needs, giving him the benefit of an all-rounded view and approach to problem solving.