May 10, 2024

A Handy Guide on Restaurant Financing Options in Singapore

Singapore’s culinary scene is both diverse and dynamic, offering a range of flavours that cater to every palate. For aspiring restaurateurs, the city-state presents a land of opportunity where food is not just sustenance but a way of life. Yet, amidst the bustling hawker centres and Michelin-starred establishments, starting a restaurant requires a significant financial investment. With the food service industry’s operating surplus reaching SG$2.95 million in 2021, the stakes are high, and the competition is fierce.

To enter this lucrative market, understanding the financial underpinnings is essential. In fact, the sector saw a 10.4% increase in sales in 2021, reflecting a resilient recovery and a positive trajectory. However, the journey from concept to customer involves more than culinary creativity; it requires a robust financial strategy.

In this article, we’ll explore how to secure the necessary capital for your restaurant venture and discuss the various financing options available to Singaporean restaurateurs, from traditional loans to innovative funding methods. With this knowledge, you can ensure your establishment not only opens its doors but also thrives in Singapore’s competitive culinary landscape.

Understanding the Costs

Before exploring financing options, it’s important to understand the costs related to running a restaurant in Singapore, as every factor is essential in your financial strategy.

Rental Fees

Location holds significant importance in the F&B sector in Singapore. Monthly expenses, particularly in highly desirable locations such as Orchard Road or Marina Bay, can be significantly impacted by rental fees.


In SG, small restaurant renovation costs can range from S$200 to S$300 per square foot, depending on the extent of the work required. Truly, it’s a balance between creating an inviting space and managing your budget.

Licences and Permits

Operating a restaurant requires various licences and permits. For instance, the food shop licence is essential for any establishment selling food and costs S$195 annually.

Financing Options for Singaporean Restaurateurs

Finding the appropriate funding is a crucial stage for any restaurant owner seeking to launch or grow their business in Singapore. Below are the different possibilities that can assist in realising your culinary dreams.

Traditional Term Loans

In Singapore, traditional term loans are a fundamental aspect of business funding. Banks and authorised money lenders provide these loans, delivering a single amount with a set interest rate and an organised repayment schedule. They are perfect for restaurant owners with a strong business plan and a good credit history, providing substantial funding for future investments.

Merchant Cash Advances

Suitable for establishments with high card transaction volumes, such as restaurants and cafes, merchant cash advances offer instant funding in return for a percentage of future credit card sales. This funding choice allows for flexibility but may lead to increased expenses in the future.

Lines of Credit

Lines of Credit available in Singapore offer businesses a flexible way to obtain funds up to a set limit as required. This solution is advantageous for handling cash flow and dealing with unexpected costs, as interest is only charged on the amount used.

Equipment Financing

Equipment financing serves as a practical choice for acquiring essential kitchen equipment. Financial institutions in Singapore extend loans tailored for this purpose, often leveraging the equipment itself as collateral. This approach allows businesses to spread the equipment’s cost over time.

Government Grants and Schemes

The Singapore government supports the F&B industry with grants and schemes that foster business growth minus the burden of repayment. Initiatives like the Productivity Solutions Grant (PSG) promote technology adoption, while the Food Delivery Booster Package (FDBP) assists in transitioning to delivery services. Ultimately, these efforts help enhance sector capabilities and spur innovation within the industry.

Tips for Choosing the Right Financing Option

Choosing the right funding choice is a critical decision for every restaurant owner in Singapore. Here’s how you can approach this decision-making process:

Assess Your Needs

Understanding your financial needs is vital before seeking funding. Consider the size of your business and identify areas where funding is needed. Make sure the amount you borrow is in line with your business objectives and avoid overextending for startup, expansion, or equipment improvements.

Understand the Terms

Financing terms vary among lenders in Singapore, so it’s essential to grasp the interest rates, fees, and repayment schedules beforehand. Look for terms that match your business’s cash flow patterns and ensure you’re comfortable with the repayment plan before making commitments.

Consider Flexibility

Flexibility and adaptability are imperative in the F&B industry. Certain funding choices, like lines of credit or merchant cash advances, provide increased repayment flexibility and better adaptability during slower business cycles.

Plan for the Future

Consider long-term implications when choosing a financing option. Think about how your decision will affect the future growth and expandability of your business. Make sure the selected choice matches your long-term goals and doesn’t limit future chances for growth or progress.

Setting the Table for Success

Securing appropriate funding is crucial for the success of any restaurant in Singapore. By understanding the expenses and choosing financing options wisely, you’re headed in the right direction. It involves making deliberate decisions that are in line with your company’s objectives and the conditions of the nearby market.

Smart City Kitchens provides a practical solution for restaurants seeking expansion without the high initial costs of traditional physical locations. We offer kitchens that are fully equipped for delivery, so you can concentrate on cooking without worrying about the logistics. With Smart City Kitchens, you can effectively broaden your presence in Singapore’s culinary world. Discover how Smart City Kitchens can work for you today!

More insights & stories

There’s more where that came from. Get in the know and check out our addtional insights

Get started in a CloudKitchens® space today

As the leading CloudKitchens® supplier in Singapore, we can get you in touch with the right people. Contact us for a tour or if you have additional questions.

Full name
Contact number
Company name

Estimated daily orders

Preferred locations

Thanks for contacting us!

We'll reach out shortly so we can understand your business and needs better.