Step 1: name the use of funds precisely
"I need 100,000" gets a worse outcome than "I need 68,000 for a walk-in and a line replacement, and 32,000 to cover payroll through the remodel."
The use of funds determines the program, the collateral, the term, and the cost. A vague request gets pushed toward the fastest and most expensive tool by default.
Step 2: match the use to the program
Six programs cover nearly every restaurant request.
- /Equipment financing for anything you can point at: kitchen, refrigeration, POS, vehicles
- /Buildout financing for construction, permits, and leasehold improvements
- /Working capital for a single known gap such as payroll, inventory, or a repair
- /A line of credit for a gap that repeats, such as a slow first quarter every year
- /SBA 7(a) or 504 for acquisitions, real estate, or refinancing expensive short term debt
- /A merchant cash advance only when speed is worth a higher total cost
Step 3: build the file before you ask
Have the completed picture ready and the timeline shortens more than any negotiation would.
- /Three to 6 months of business bank statements
- /The vendor quote or contractor bid if the request is equipment or buildout
- /Ownership details and time in business
- /For SBA: 3 years of business and personal tax returns, interim profit and loss, balance sheet, debt schedule, and a personal financial statement
Step 4: know what qualifies you
Time in business sets the menu. Equipment can go from month 1 with a down payment, merchant cash advances want 4 to 6 months of card history, working capital wants 6 months of deposits, lines of credit want 12 months, and SBA expects 2 or more years.
Personal credit sets the price on short term programs and sets the bar on SBA, where 660 and above is the practical entry point.
Step 5: what happens after you ask
A conversation comes first. You share the basics of the business, the use of funds, and recent statements, and you see which programs fit. There is no credit application and no hard pull at that stage.
A dedicated application specific to the qualifying program comes next, then written offers showing terms, payment, and total cost. You choose what works, or you walk away with nothing owed.
Step 6: compare the total dollars
Monthly payment is not cost. A shorter term with a lower total can carry a higher payment, and a factor rate quote has no interest rate to compare at all.
Ask every offer for one number: total dollars repaid. That is the only figure that compares cleanly across an equipment loan, a line of credit, and an advance.
Calculator
Debt service coverage and maximum payment
Underwriting sizes a request on cash flow, not on what you ask for. This runs the same ratio a credit analyst runs, and shows the monthly payment your cash flow supports at the 1.15x coverage most term programs look for.
Cash flow available for debt service, after owner pay and before financing costs.
Your numbers are ready
Tell us about the operation and the results open up.
The math above runs on your inputs. Send the request and the figures unlock on this page, a specialist reviews what you entered, and you get written options to compare. No credit application, no hard pull.
We email you a copy of these figures. They are estimates for planning, not an offer, a quote, or a preapproval of any kind.
The arithmetic
Net operating income = annual sales x operating margin. Annual debt service = (new monthly payment + existing monthly payments) x 12. DSCR = NOI / annual debt service. Supportable payment = NOI / 1.15 / 12 - existing payments.
Sources
- 1SBA 7(a) underwriting looks for debt service coverage of at least 1.15xU.S. Small Business Administration. SOP 50 10, credit standards for 7(a) term loans, cash flow as the primary repayment source measured on a debt service coverage basis.
- 2Amortizing payment formula: P x i / (1 - (1 + i)^-n)Standard time value of money identity. The same closed form used by the PMT function, with i as the monthly rate and n as the number of monthly payments.
- 3Occupancy costs commonly run above 5 percent of salesNational Restaurant Association. Restaurant Operations Report, occupancy cost as a share of sales for full service operations.
Estimates, not offers: Amounts, terms, and funding times are estimates based on programs commonly available in food service. Actual terms vary by program, lender underwriting, time in business, revenue, and credit profile. Nothing here is an offer of credit or a guarantee of approval.