Yes people start restaurants with their own money -- almost all restaurants are people taking personal risk, even franchise chains like Subway and McDonalds! And yes I started my business with (mostly) my own money. Your ideas of business risk vs personal are adorable but wrong. I don't mean that as insult, just gentle correction. Bank business loans are not separable from personal risk, they are usually completely backed by personal collateral, and people who's restaurants are funded by the bank and fail are getting wiped out every day. You're absolutely right -- it's a nightmare. The only people not risking their own money are startups that get angel/venture/grant funding, and loads of them are still personally invested too. Venture groups almost never fund new restaurants, because restaurants are way too risky, and they're way harder to scale than software.