Cliffport Business Capital, a small-business funding service in Galveston, TX, explains how to borrow to buy an existing restaurant: how price can be judged, the seller records lenders want, permit and lease checks, a worked purchase structure, and Galveston County, TX restaurant counts.
How Much to Pay for a Restaurant
This site does not publish valuation multiples. Price can reflect the owner's earnings, the value of equipment, the lease terms and how much of the business depends on the current owner. A restaurant with a short lease left can be worth less than the same one with years remaining.
Records Lenders Want From the Seller
- Three years of tax returns and profit and loss statements
- Point-of-sale and card-processing reports
- The lease and any assignment terms
- Equipment list with ages
- Payroll records
- Health inspection history
How to Get a Business Loan to Buy a Restaurant
- Agree on a price and a letter of intent, subject to financing.
- Collect the seller's records.
- Check the lease can be assigned to you.
- Check permits with each issuing office, including any alcohol permit.
- Request a term loan, sometimes with a seller note.
- Plan working capital for the first months under new ownership.
A Worked Purchase Structure (Illustrative)
A full-service restaurant is priced at $350,000 including equipment. The buyer invests $70,000, the seller carries $50,000 over five years, and a term loan covers $230,000. The buyer also keeps $40,000 for working capital. The question for the lender is whether the restaurant's earnings cover both loan payments with room to spare.
How to Secure Funding for a Restaurant: The Permit Question
If the restaurant serves alcohol, confirm with the permitting office what the buyer needs. The loan schedule should allow for that; see the Texas mixed beverage permit guide.
Restaurants in Galveston County, TX
The county had 293 full-service and 278 limited-service restaurants in 2023, with 65 and 27 in ZIP 77550 (County and ZIP Code Business Patterns 2023). The industry note is on the restaurants page. County figures are on the Galveston, TX data page; more articles on the blog.
By Cliffport Business Capital · Updated