Kitchen rebuild
Every closed day costs rent and key staff with no sales coming in. Here is how to price the closure, decide between a phased and a full rebuild, and size funding around the insurance timeline instead of the contractor quote.
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Updated October 13, 2026 · Merchant Fund Express
If your kitchen is out, the number that matters most is not the rebuild quote. It is the cost of each closed day, multiplied by how long each rebuild plan keeps you closed. A phased rebuild that gets the hood, suppression system and cooking line passed first usually reopens weeks sooner than a full rebuild, and those weeks are often worth more than the extra cost of bringing the contractor back for phase two.
Funding fits when the gap is timing: the contractor wants deposits now and the insurer pays in eight to ten weeks. It does not fit when the claim is disputed, the lease is in doubt, or the restaurant was losing money before the kitchen went down. In those cases the rebuild needs a different answer first.
Take a 90-seat restaurant with $95,000 a month in deposits whose kitchen is closed by a grease fire on Monday, October 5, 2026. Fixed costs that continue while closed (rent, salaried staff it wants to keep, insurance, utilities) are about $5,800 a week. When open, each week contributes about $7,700 after food and hourly labor. The full rebuild bid is $148,000. Split into phases, it is $98,000 for the hood, fire suppression, cooking line and reinspection, then $50,000 for walk-in panels, finishes and dish area, done on closed Mondays.
| Line | Full rebuild | Phased rebuild |
|---|---|---|
| Weeks fully closed | 10 (reopen Dec 14) | 6 (reopen Nov 16) |
| Fixed costs while closed | 10 × $5,800 = $58,000 | 6 × $5,800 = $34,800 |
| Lost contribution while closed | 10 × $7,700 = $77,000 | 6 × $7,700 = $46,200 |
| Limited menu at 80% of sales | None | 5 weeks × $1,540 = $7,700 |
| Cost of the closure | $135,000 | $88,700 |
The phased plan saves about $46,300 of closure cost. Even if the contractor charges $6,000 to remobilize for phase two, the restaurant comes out roughly $40,000 ahead. That is why the first question to a contractor is not “how much” but “what is the shortest path to a passed inspection.”
All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.
Assumptions: $35,000 of cash on hand on October 16. The insurer has estimated $128,000 of covered loss less a $10,000 deductible, so $118,000 is payable, and it agreed to advance $45,000 of the undisputed portion. The owner takes $60,000 of revenue-based funding with an assumed $1,800 fee, so net proceeds are $58,200. At an illustrative factor of 1.30, total repayment is $78,000, in 40 weekly payments of $1,950 from Friday, October 23, 2026 through Friday, July 23, 2027.
| Date | Item | Amount | Balance |
|---|---|---|---|
| Oct 16 | Cash on hand | $35,000 | |
| Oct 16 | Net proceeds of the advance | +$58,200 | $93,200 |
| Oct 19 | Phase one deposit to contractor (40%) | −$39,200 | $54,000 |
| Oct 23 to Nov 13 | Fixed costs, 4 closed weeks | −$23,200 | $30,800 |
| Oct 23 to Nov 13 | Four weekly payments of $1,950 | −$7,800 | $23,000 |
| Nov 6 | Insurer advance on undisputed portion | +$45,000 | $68,000 |
| Nov 13 | Phase one balance (60%) | −$58,800 | $9,200 |
| Nov 16 to Dec 18 | 5 weeks open at 80%: $6,160 in, $5,800 fixed, $1,950 payment | −$7,950 | $1,250 |
| Dec 18 | Remaining claim ($118,000 less $45,000) | +$73,000 | $74,250 |
| January 2027 | Phase two work | −$50,000 | $24,250 |
The plan works, but the low point of $1,250 in mid-December is too thin for a restaurant: one broken mixer or a slow week and the account goes negative. Three fixes, in order of cost: ask the contractor for three draws instead of two, ask the adjuster about business interruption coverage for the closed weeks, or request a slightly larger amount with a longer term. When the remaining claim lands in December, ask whether paying the balance early reduces what you owe; read early payoff discounts before you sign, not after.
All figures in worked examples are illustrations of the arithmetic, not offers or quotes. Real terms depend on your file and the funder.
A restaurant with 3+ years in business, a 650+ FICO and $25,000 a month in revenue reads against our first tier, where a term loan carries 0% origination and a line of credit starts from 1% per month. A line is the better tool for bridging an insurance check, because you repay it the day the check clears. Newer restaurants or scores in the 600s read against revenue-based funding: 6+ months, $60,000 in verifiable revenue and an $800 minimum daily balance. New cooking equipment can also go through equipment financing, which keeps the advance smaller. Requests run from $25,000 to $5 million.
One honest limit: payments generally start shortly after funding, not when you reopen. The schedule above carries four payments while closed. Build them in.
No tax returns are needed for a typical first review; full financials are usually requested only above $250,000. The application takes about five minutes and starts with a soft credit pull. If the kitchen failed from age rather than a loss, see repair or replace restaurant equipment; for the full recovery picture, recovery after a flood or fire.
Price your closed day, get the contractor to split the bid, and confirm what the insurer will advance. Then apply with your pre-loss statements and the bid. Complete files get a same-day decision, and qualified businesses can be funded in as little as 24 hours.
Yes, if the months before the closure show a working restaurant and there is a clear path to reopening, such as an accepted claim or a signed bid. The reviewer reads your pre-loss statements. Plan for payments to start before you reopen.
If you can carry the closed weeks from cash, waiting is cheaper. If waiting adds four or more closed weeks, compare the closure cost per week with the cost of funding. In the example above, each closed week cost about $13,500.
No. If phase one cannot pass inspection on its own, or the contractor cannot return for phase two without a long delay, a full rebuild can be the faster route. Ask for both schedules in writing.
The same closure math applies, without the insurance check. Size the request to the rebuild plus the closed weeks, and compare a term loan or equipment financing with an advance before deciding.
You can ask. Some agreements reduce the balance for early payoff and some do not. Get the answer in writing before you sign.
Same-day decision. Applying takes a few minutes and will not affect your credit score.
