A business term loan is the most traditional restaurant financing structure: you receive a lump sum of capital upfront and repay it through fixed monthly payments over a set term (typically 1 to 5 years). The simplicity is the appeal — predictable payments, defined end date, straightforward use of funds. For restaurant operators who need substantial capital and value payment predictability, term loans often make the most sense.
Prime Restaurant Capital structures restaurant term loans from $25,000 up to $5,000,000 for operating restaurants generating $20,000+ in monthly revenue. Funds typically deploy within a few business days of approval, dramatically faster than the 60-120 days traditional banks require for term loan underwriting.
What Restaurant Term Loans Are Used For
The flexibility of a term loan makes it ideal for substantial, defined business needs:
- Major equipment purchases — When you need a complete kitchen overhaul, multiple equipment items, or a custom build-out
- Restaurant renovations — Dining room refresh, kitchen rebuild, exterior facelift
- Second location buildout — Significant capital for opening additional restaurant units
- Refinancing existing debt — Roll higher-interest existing loans into one term loan with better rates
- Acquisition of another restaurant — Buying out a competitor or established operation
- Working capital reserve — Build cash cushion for seasonal operations or unexpected expenses
Term Loan vs Other Restaurant Funding
Term Loan vs Working Capital Loan
Working capital loans are typically shorter (6-18 months) with daily or weekly repayment. Term loans are longer (12-60 months) with monthly payments. Term loans are better for substantial planned expenses; working capital is better for shorter-term operational needs.
Term Loan vs Line of Credit
Line of credit gives you ongoing access to draw funds as needed. Term loan delivers a single lump sum. Line of credit is better for variable cash needs; term loan is better for one-time defined needs.
Term Loan vs Revenue-Based Financing
Revenue-based financing payments scale with daily sales. Term loan payments are fixed regardless of sales. Term loans typically offer lower total cost; revenue-based offers payment flexibility for variable revenue restaurants.
Restaurant Term Loan Qualifications
- Operating restaurant in the United States
- Minimum 6 months in business
- Monthly revenue $20,000+
- Personal credit score 500+ accepted
- Active business bank account
Application Process
- Apply in 5 minutes — Tell us about your restaurant, upload 3 months of bank statements
- Same-day decision — Underwriting reviews and responds with offer including funding amount and total cost
- Sign and fund — Sign agreement electronically; funds typically deploy within 1-3 business days
- Repayment — Fixed monthly automatic ACH payments begin the following month
