Definitions for the terms used above.
- equipment paper
- A loan or lease tied to a specific machine. The machine itself is the security, so approval leans on the value of the hardware more than on your bank statements.
- working capital
- Cash for the everyday gaps: payroll, inventory, rent, and repairs. It is repaid out of daily or weekly sales rather than from one big event.
- check average
- What a single ticket rings up on average. Two rooms with the same cover count and different check averages are two different businesses to a lender.
- underwriting
- The lender reading your numbers to decide how much risk you are. Bank statements, time in business, and existing debt carry the most weight.
- buildout capital
- Money for the work that turns a space into a working kitchen: plumbing, electrical, hoods, walls, and permits. It pays for labor and materials you cannot resell, so it is priced differently than money for a fryer.
- draw
- Taking money out of an approved line or loan. Draws tied to construction milestones mean you only start paying interest on each piece as you use it.
- hard credit pull
- A formal credit check that shows on your report and can move your score a few points. It happens only after you pick a specific lender, not to get information.
- SBA loan
- A bank loan partly guaranteed by the Small Business Administration. Lowest cost of the options, longest paperwork, and the slowest to fund.
- covers
- The number of guests served. Lenders pair it with check average to judge how reliable a month really is.
- line of credit
- A preapproved pool of money you pull from only when you need it, then pay back and reuse. You pay for what you draw, not for the full amount sitting there.
- merchant cash advance
- You sell a slice of future card sales for cash today. Fastest money available, and the most expensive, so it fits an emergency rather than a plan.
- term
- How long you have to repay. A longer term lowers the monthly payment and raises what the money costs in total.
- commissary
- A licensed production kitchen used to prep off site, most often by trucks and catering operations. It carries its own rent, equipment, and permits.
- shoulder season
- The in between weeks on either side of your busy season. Sales fall while rent, insurance, and salaried payroll do not.
- collateral
- Something the lender can take back if the loan is not repaid, usually the equipment being financed. More collateral generally means a lower cost.
