Restaurants do not fail on one bad review. They fail when cash leaves the account faster than covers come in. Food and labor — prime cost — already want 60%–65% of sales in a healthy full-service room. Rent wants another slice. A merchant cash advance that drafts daily takes a third slice. What is left cannot buy a Saturday cook.
An unsecured restaurant term loan is a 3-, 5-, or 7-year installment from $50,000–$500,000, often funded in 3–10 business days, with no lien on the dining room. Pricing is quoted per file in an approximate 6%–18% band. It will not make a broken concept work. It will stop a cash-timing problem from becoming a closed-sign problem.
SBA restaurant loans remain the better permanent stack when you have time: 7(a) can wrap acquisition, buildout, kitchen, franchise fees, and working capital. This page is for the file that cannot wait 45–90 days — or for the operator who needs to refinance an MCA before prime cost recovers.
Jaken Finance Group originates property loans and helps operators get matched to SBA. Unsecured pre-qualification is Preferred Funding Group.
Pre-qualify for restaurant working capital →
What the money is for in a restaurant
- Leasehold buildout and a second hood when the landlord’s TI will not cover the last $80,000 and the opening date is on a lease clock
- Payroll and inventory through a slow season or a post-opening ramp so you do not short the line
- Paying off an MCA whose drafts are now larger than the bar’s weekly liquor cost — see MCA refinance
- Franchise fees and opening costs when the franchisor’s calendar is shorter than SBA’s
- Small FF&E that is awkward for a full equipment loan (mixed invoices, used pieces, deposits)
If the invoice is a single truck, range battery, or walk-in with a vendor quote, start with equipment financing at 6%–14%. That product takes the machine as collateral and often prices inside the unsecured band. Unsecured is for cash that is not sitting on a serial number.
Model a buildout payment
The Restaurant buildout preset loads $175,000 over 5 years at an illustrative 12.5% — about $3,937 a month. That is roughly $908 a week. If the room does 120 covers on a good Saturday at a $48 average check, one strong day services a lot of that note. If you are still in construction, the payment starts before those covers exist — budget from other locations or from a personal draw, not from hope.
Unsecured term loan calculator
Model a 50,000–500,000 business-purpose term loan on a 3, 5, or 7-year amortizing schedule. Compare the payment to a merchant cash advance. Results are estimates — not a loan offer. Pricing is quoted per file by Preferred Funding Group.
Monthly payment
—
Fully amortizing
Total interest
—
Over the full term
Total repaid
—
Principal + interest
Effective cost
—
Interest ÷ principal
Program checklist
Term loan vs merchant cash advance
| Term loan | MCA | |
|---|---|---|
| Amount funded | — | — |
| Estimated monthly outflow | — | — |
| Total extra cost | — | — |
Tool-only page: unsecured term loan calculator. Program terms: unsecured term loans.
The upside of financing a restaurant instead of starving it
1. Opening on the lease’s date is an asset. A landlord who gave you 120 days of fixturing will not give you 120 days plus the SBA calendar. Every month dark is rent, insurance, and a neighborhood that already walked into the competitor two doors down. Interest on a $175,000 5-year note is a known cost. A missed opening is an unknown one that usually loses.
2. Prime cost needs a stable denominator. When MCA drafts float with sales, a slow Tuesday still loses a large share of a small day. An amortizing payment is the same number on Tuesday and Saturday. You can manage food and labor against a payment that does not surprise the bookkeeper. That is the same discipline SBA restaurant underwriters already look for on prime cost and rent-to-sales.
3. You keep the building (if you own it) available for a real estate loan. Putting a blanket on the fee-simple dining room to float payroll is how operators mix stacks they later cannot refinance. Unsecured working capital leaves commercial or bridge capacity on the property. If you do not own the real estate — most restaurants do not — unsecured is often the only non-SBA path that does not require a landlord consent fight on a leasehold mortgage.
4. You can buy the profitable room instead of dreaming a new one. Lenders of every kind prefer an existing P&L. Unsecured capital can be the equity check on an acquisition while you pursue 7(a) for the rest, or the full check if the price fits $500,000. The buyout and acquisition page walks partner math; this page is the operating reality of food and labor.
5. Speed beats a “maybe” from a bank. A 70-seat independent with two years of returns and a 640+ personal score (illustrative — no floor is published here) can often get an unsecured decision in days. That is not a reason to skip SBA if SBA will clear and you can wait. It is a reason not to lose a hood slot, a chef, or a corner space while you wait.
Financing is how a restaurant times cash to covers. It is not how a restaurant invents covers.
Unsecured vs SBA vs equipment vs MCA
| Need | Better first call |
|---|---|
| Buy a profitable restaurant or franchise, 45–90 days available | SBA restaurant loans / 7(a) |
| Space or equipment lead time will not wait | Unsecured term loan (this page) |
| Single vendor invoice for a serial-numbered asset | Equipment financing, 6%–14% |
| Daily ACH is already hitting the account | Refinance the MCA |
| You own the building and need a mortgage | Commercial financing or SBA 504 |
| You are buying the real estate as an investment rental | DSCR — not a restaurant working-capital loan |
Do not price unsecured 6%–18% as if it were hard money (8.99%–13.5%) or DSCR (5.75%–10.5%). Those are property products Jaken Finance Group originates. This note is unsecured and referred.
The FTC’s small-business financing notes are worth a read if an MCA broker is in your inbox weekly. Factor math belongs on a spreadsheet, not on a handshake.
Worked example: independent, buildout shortfall
Lease is signed on a 1,900-square-foot corner. Landlord TI covers demising walls and HVAC. The operator still needs $160,000 for the bar, the remaining kitchen package, POS, and smallwares. SBA 7(a) was started; the general contractor can start in 12 days or will take another job.
A $160,000 5-year loan at an illustrative 12.5% is about $3,600 a month. Opening in 10 weeks vs opening in 7 months is the comparison that matters. If trailing concept sales at the operator’s other room support that note from day 60, the loan is a timing tool. If this is a first restaurant with no other cash flow, the same payment is a bet. Unsecured underwriting will see that distinction on the tax returns.
Worked example: MCA drafts vs Saturday labor
Sales $72,000 a month. MCA leftover payoff $95,000 at a 1.36 factor equivalent on remaining receipts. Weekly drafts ~$3,800. Saturday night is short two cooks because wages cannot clear.
Refinancing $95,000 into 5 years at 13% is about $2,162 a month (~$500 a week). Labor can be staffed. The note is still there on Monday. The MCA refinance calculator preset is built for this exact swap — use remaining payoff.
Unsecured term loan payment vs merchant cash advance. Estimates only — not a loan offer.
Monthly payment
—
Fully amortizing
Total interest
—
Over the full term
Total repaid
—
Principal + interest
Effective cost
—
Interest ÷ principal
Program checklist
Term loan vs merchant cash advance
| Term loan | MCA | |
|---|---|---|
| Amount funded | — | — |
| Estimated monthly outflow | — | — |
| Total extra cost | — | — |
What underwriting still wants from a restaurant
- Two years of personal tax returns (and business returns if the entity files)
- FICO 8 — no published minimum on this site
- Year-to-date P&L that matches the bank statements
- Lease or LOI (term remaining, assignment rules, personal guaranty already on the lease)
- Use of funds with invoices or a contractor draw schedule where you have them
- If an MCA exists: a dated payoff
Clean books that reconcile beat a glossy deck. That is true on SBA and it is true here. New independent concepts with no returns are the long shot; existing cash flow or a franchise is the short one.
Risks specific to food and beverage
- The payment starts before the health department signs. Construction interest is not theoretical. Hold back a month of payments in the loan proceeds if you can.
- Prime cost does not care about your term. A 7-year note lowers the monthly number and raises total interest. If the concept cannot print 60%–65% prime cost, a prettier payment will not save it.
- Personal guaranty is the collateral. There is no dining-room foreclosure on this product. There is you.
- Two landlords, two notes. If you also personally guaranteed the lease, you already have a large contingent liability. Size the term loan against that, not in a vacuum.
How to apply
- Write a one-page use of funds: buildout vs payroll vs MCA payoff vs franchise fee.
- Run that amount in the calculator on a 5-year term, then stress 3 and 7.
- Submit the unsecured financing form.
- If you need SBA as takeout or the building financed, request commercial financing or start from SBA restaurant loans.
Pre-qualify for restaurant capital · Unsecured term loans · (833) 264-7776
Sources
- SBA — loan programs
- FTC — small business financing staff perspective
- CFPB — Ability-to-Repay and Qualified Mortgage standards (consumer mortgage context — this restaurant facility is business-purpose)
Calculator outputs are educational estimates. Approval and rate are quoted per file by Preferred Funding Group. Jaken Finance Group originates non-owner-occupied investment property loans and can help match SBA restaurant financing. Unsecured term-loan pre-qualification is a referral.