Restaurant Loan Calculator

How the restaurant loan calculation works

A term loan is repaid on an amortization schedule: each fixed monthly payment covers the interest due that month plus a slice of principal, so the balance — and the interest portion — shrinks over time. The payment formula is P × i ÷ (1 − (1 + i)⁻ⁿ), where P is the loan amount, i is the monthly rate (APR ÷ 12), and n is the number of months. This calculator runs that math and then divides the payment by your monthly sales so you can see the cash-flow impact, not just the number.

What payment-to-sales tells you

Restaurants carry food cost (often 28–35% of sales), labor (25–35%), and occupancy cost (frequently 8–12%) before a dollar of profit. A loan payment is a fixed cost layered on top, so it matters how big it is against revenue:

• Under 5% of sales — comfortable for most concepts; the payment leaves room in the P&L.
• 5%–10% — manageable, but check the payment against your slowest months, not your average.
• Over 10% — heavy. A large fixed payment on thin margins is a common reason a busy restaurant still runs short on cash.

These bands are directional, not a lending rule. If the payment looks heavy, the levers are a smaller amount, a longer term (lower payment, more total interest), or a lower-rate product. Run your own occupancy math with the restaurant occupancy cost calculator, and if you're weighing an advance instead of a loan, the restaurant MCA calculator shows holdback and factor-rate cost.

Loan vs. cash advance for restaurants

A term loan charges interest on a declining balance, so it is almost always cheaper per dollar than a merchant cash advance, which applies a fixed factor rate to the full amount up front. The tradeoff is speed and qualification: loans take longer and need stronger credit and financials, while advances fund in 24–48 hours on revenue history. See restaurant cash advance vs loan and the full restaurant funding options comparison, plus restaurant term loans and SBA loans for restaurants for the lower-cost paths.

This calculator provides estimates for educational purposes only and is not financial advice or a loan offer. Actual rates, terms, and approval vary by lender and by business. Not all applicants qualify.