> what is a good risk, what the rates should be, handling repossession, negotiating terms, dealing with laws, all that stuff
These are the problems being worked on in defi right now and why people are so excited about it.
> in the cryptocurrency future, how will it be easier for a restaurant to use their business as collateral to take cash to do upgrades?
In the idealized future, the restaurant would have their complete transaction history available on-chain for lending contracts to use. Then, instead of a banker making a decision if the restaurant deserves the loan, an algorithm can make that determination and instantly grant the loan. Such a contract might use data points like amount of restaurant supplies purchased, number of customers, average sale price, demographics of the location, all of which would be on-chain and available to a contract.
This is good because it removes bias and discrimination that currently exists in the traditional system, increases the speed at which your restaurant owner can access their capital, and decreases the overall cost of doing the transaction because humans don't need to be involved.