Can You Afford the Restaurant Loan—and Still Pay Yourself?

The approved loan amount is not necessarily the cash you receive. The monthly payment is not the total financing cost. Start by writing the complete terms of each offer on one page.

Collect comparable terms

Record principal, nominal rate, fixed or variable structure, fees paid or withheld, maturity, amortization period, repayment frequency, interest-only periods, balloon balance, collateral, guarantee, prepayment terms and any required insurance. Obtain funding and first-payment dates in writing. Do not compare a monthly amortizing loan with a daily sales-remittance product using only the advertised rate.

Work through an ordinary loan

A fictional $100,000 loan at 10% nominal annual interest amortized over 60 monthly payments costs about $2,124.70/month. If $3,000 fees are withheld, usable proceeds are $97,000. Total interest is approximately $27,482, plus the $3,000 fee.

If the restaurant has $3,500 of monthly cash available after operating costs and the owner’s planned pay, the regular payment leaves about $1,375.30. Verify what “available” includes: taxes, repairs, other debt and working-capital changes may still be missing.

Do not confuse amortization with maturity

A loan calculated as if it will be repaid over 60 months but due in 36 months can leave a substantial balance at maturity. That balloon must be paid or otherwise resolved; refinancing is not guaranteed. The loan calculator shows the remaining balance and exports the monthly schedule.

Interest-only periods reduce early principal repayment, not the amount owed. Model the later payment and maturity balance. The tool uses a fixed nominal rate, monthly payments and explicitly entered terms; it does not claim to calculate APR or model merchant cash advances.

Financing cannot repair a permanent operating loss

If normal operations lose $4,000 each month before new debt, another loan adds payment obligations. First reconsider contribution, sales evidence, labor coverage and fixed costs. A temporary cash-timing gap and an ongoing unprofitable operation require different decisions.

Put the funds and payments into the cash workbook. Keep owner funds separate from loan proceeds. Account for preopening payments, lower sales and a delayed opening; do not assume the entire loan remains available on opening day.

Prepare for a lender conversation

Gather the business plan, sources-and-uses schedule, personal/business documents requested by the lender, current financial statements if applicable, quotes, lease terms, ownership details and support for sales assumptions. The SBA 7(a) page explains that program’s framework; a program description is not approval or a quoted offer.

Use the financing comparison worksheet to list exclusions and unanswered questions. Ask qualified financial and legal advisers to assess guarantees and contractual risk before accepting an offer. The correct result may be a smaller project or less debt.