Larkpine Lending Group, a small-business funding service in Iowa City, IA, explains coffee shop funding: espresso machine and equipment financing, build-out loans, working capital for payroll, and how card-heavy cafes should weigh merchant cash advances. Johnson County cafe counts come from Census County Business Patterns 2023.
| Snack and beverage bars, Johnson County, IA (2023) | 50 |
|---|---|
| Paid employees | 718 |
| Under five employees | 16.0% |
| Annual payroll (2023) | $12.4 million |
| Structures to compare | Equipment loans plus working capital |
How to finance a coffee shop
Divide the costs into three piles. Machines and fixtures (espresso machine, grinders, brewers, refrigeration, a water filtration system) are equipment and can be financed on their own. The build-out (plumbing, electrical, counters, seating) usually needs a term loan. Opening inventory and the first months' payroll are working capital.
Owners asking how to get a loan for a coffee shop that is not yet open should expect partners to want an operating history; equipment financing, secured by the machines, is one place a new cafe can start.
Coffee machine financing and other equipment options
Espresso machines can be bought with an equipment loan or leased. A lease may include service and an upgrade path; a loan means you own the machine at the end. Ask whether the lease is a true lease with a return option or a purchase in disguise, and compare total payments.
- Espresso machine and grinders
- Batch brewers and hot-water towers
- Under-bar fridges and pastry cases
- Ice machine and water filtration
- Point-of-sale hardware
Coffee shop equipment financing options are covered in more detail on the equipment financing page.
Payroll at a cafe
Only 16.0% of the county's snack and beverage bars had fewer than five employees in 2023, and the 50 establishments employed 718 people. Weekly payroll is a recurring bill alongside rent and product. A dip in sales for a few weeks puts pressure on it.
A working capital loan or a line of credit covers that kind of gap better than a merchant cash advance, whose remittances come out of every day's card sales.
Illustrative arithmetic: one machine, two ways
Illustration only, not an offer: a cafe needs a $22,000 two-group espresso machine. Option A is a loan with $2,000 down and 48 monthly payments. Option B is a 48-month lease that includes service, with a buyout at the end. Compare the total of all payments plus the buyout in B against the total of payments plus expected repairs in A. A lower monthly figure can still belong to the dearer machine overall.
Business loans for coffee shop owners who want a second location
A second cafe is a term-loan question: build-out, a second set of machines and a few months of payroll before it pays for itself. Partners read how the first shop performs. The term loan page covers expansion, and the restaurant page covers kitchen-heavy food service.
Cafes in Johnson County, IA by the numbers
Johnson County, IA had 50 snack and nonalcoholic beverage bars in 2023 (NAICS 722515, the Census category that includes coffee shops), employing 718 people with about $12.4 million in annual payroll (U.S. Census Bureau, County Business Patterns 2023). Nonemployer Statistics 2024 counted just 5 such businesses without paid employees. Broader food service figures, including 445 accommodation and food services employers, are on the Iowa City, IA page.
What partners usually review for cafes
- Daily card deposits over recent months
- Lease term and any landlord contribution to the build-out
- Quotes for the bar equipment, with installation
- Existing advances and their remittances
Questions a cafe owner should settle first
- Is the espresso machine bought, leased, or supplied by a roaster under a coffee contract?
- Who owns the machine if the coffee contract ends?
- How many weeks of rent and payroll does the cafe hold in cash?
- What share of sales arrives by card, and how quickly does it settle?
- Does the lease allow the plumbing and electrical work the bar needs?
Roaster-supplied equipment can lower the upfront cost but tie you to a supply agreement; read both together.
By Larkpine Lending Group · Updated