Getting a small business loan for a restaurant can be challenging, especially if you lack experience in owning or running a business. However, your other factors such as market research, a team of experienced individuals, and an underserved demographic can work in your favor.

Lenders typically evaluate several factors when considering a loan application, including:

1. Business Plan: A well-developed business plan is crucial to demonstrate your understanding of the industry, market, competition, and financial projections. It should outline your strategy for success and how you plan to repay the loan.

2. Experience: While you may lack direct experience, having a team with relevant experience can compensate for this deficiency. Lenders will assess the qualifications and track record of your team members to determine their ability to successfully operate the restaurant.

3. Credit Score: A credit score of 650 is considered fair but not excellent. While it may not disqualify you from getting a loan, it could affect the interest rate and terms offered by lenders. Higher credit scores generally improve your chances of loan approval and better loan terms.

4. Collateral: Lack of collateral can be a challenge when seeking a loan. Collateral provides security to the lender in case of default. While having some cash on hand is helpful, it may not be sufficient for a loan of $200-500k. Lenders may require additional collateral such as property or other valuable assets.

Starting an LLC can provide certain benefits, such as separating personal and business liabilities. It may also make your business appear more professional and organized, which can positively influence lenders. However, it does not guarantee loan approval on its own.

To improve your chances of getting a small business loan, you could consider the following:

1. Seek a Small Business Administration (SBA) Loan: The SBA provides loan programs specifically designed for small businesses. These loans have more flexible requirements and lower down payment options. However, they still require a solid business plan and may involve a longer application process.

2. Increase Your Credit Score: Work on improving your credit score by paying bills on time, reducing existing debt, and resolving any credit issues. A higher credit score can enhance your loan eligibility and terms.

3. Build Relationships with Local Banks: Developing relationships with local banks and credit unions can increase your chances of obtaining a loan. They may be more willing to consider your application based on your local connections and knowledge.

4. Seek Investors or Partners: Bringing in investors or partners with relevant experience and financial resources can strengthen your loan application. Their involvement can provide additional collateral or guarantees, making lenders more comfortable.

It's important to note that each lender has different criteria and policies, so it's advisable to approach multiple lenders and explore your options. Consulting with a financial advisor or small business development center can also provide valuable insights and guidance in navigating the loan application process.