Restaurant Loan Rates | Ranges by Loan Type

Restaurant loan rates vary widely by loan type: SBA loans tend to run lowest, roughly in the high single digits to low teens APR; conventional term loans and lines of credit typically land in the high single digits to high 20s APR depending on credit and revenue; equipment financing sits in a similar range because the equipment secures the loan; short-term cash advances cost the most, with effective APRs that can run well into the double or triple digits once the factor rate is converted. There is no single "restaurant loan rate" — your actual number depends on credit, revenue consistency, time in business, and loan term.

What's the Average Interest Rate on Restaurant Loans?

There's no single average, because "restaurant loan" spans products priced completely differently. As a realistic range by type: SBA 7(a) loans typically run high single digits to low teens APR; bank and online term loans roughly 10-30% APR depending on profile; lines of credit similar to term loans, often slightly higher; equipment financing in a comparable range to term loans since collateral lowers the lender's risk; and short-term cash advances, priced as a factor rate rather than APR, often convert to an effective rate well above traditional loans. Always ask for the annualized cost of any offer, not just the headline number.

Rate Ranges by Loan Type

Loan type	Typical rate range	Why
SBA 7(a) loan	High single digits–low teens APR	Government guarantee lowers lender risk
Term loan	High single digits–high 20s APR	Priced on credit, revenue, and term length
Line of credit	High single digits–high 20s APR (on drawn balance)	Similar risk profile to term loans, plus flexibility premium
Equipment financing	Comparable to term loans	Equipment itself secures the loan
Short-term cash advance	Effectively higher (factor rate, not APR)	Fastest funding, thinnest underwriting, priced for speed

These are realistic ranges, not quotes — every lender prices restaurant risk differently, and your actual rate depends on your specific file. Estimate a payment at a few different rate assumptions with the restaurant loan calculator.

What Actually Moves Your Rate

Four factors do most of the work: credit score (higher score, lower rate, consistently), time in business (more history reduces perceived risk), monthly revenue and its consistency (steady revenue reads better than the same average with big swings), and loan term (shorter terms often carry lower rates but higher monthly payments). Restaurants specifically also get priced on industry risk — the U.S. Bureau of Labor Statistics shows food-service closure rates running higher than many other small-business categories in the early years, which some lenders bake into restaurant-specific pricing regardless of an individual business's health.

Why Rate Alone Is a Misleading Comparison

A lower rate on a longer term can cost more in total repayment than a higher rate on a shorter term. And a short-term cash advance's "factor rate" (e.g., 1.15–1.4×) isn't the same measurement as APR — converting it to an annualized rate is the only honest way to compare it against a loan. Always compare total repayment amount and time to full payoff, not just the number on the offer sheet. See restaurant loan requirements for what else affects the offers you'll actually see, and restaurant financing options for the full menu of loan types these rates apply to.

Rates only make sense next to structure and term — see restaurant loans for the full comparison.

Sources

• U.S. Small Business Administration — Loan programs
• Federal Reserve — Selected interest rates (H.15)

FAQ

What's the average interest rate on restaurant loans?

There isn't one average — it depends heavily on loan type. SBA loans typically run high single digits to low teens APR; term loans and equipment financing generally land in the high single digits to high 20s; short-term cash advances price much higher once the factor rate is converted to an annualized cost.

Why are restaurant loan rates higher than other small business loans?

Lenders often price in industry-level risk — restaurants close at higher rates than many other small-business categories in their early years, according to BLS data — on top of your individual credit and revenue profile. Specialized restaurant lenders that underwrite on actual cash flow rather than industry label can offer more competitive pricing to healthy businesses.

Do SBA loans really have the lowest rates?

Generally yes. The government guarantee on SBA 7(a) loans lowers the lender's risk, which typically translates into the lowest rates available to restaurants — the trade-off is a longer, more document-heavy application process.

How can I get a lower rate on a restaurant loan?

Improve the factors lenders weight most: raise your credit score, build a longer track record of consistent revenue, and consider a shorter loan term if the higher monthly payment is manageable. Comparing multiple offers rather than accepting the first one also matters — restaurant risk is priced very differently from lender to lender.

This guide is for general information only and is not financial advice. Rates shown are general ranges, not quotes, and vary by lender and change over time. Confirm current terms directly with any lender before applying.