Plain English
Every financing term on this site, defined in one sentence.
23 terms, no jargon inside the definitions, each with its own link you can send to a partner or a bookkeeper.
What this page covers
This glossary defines every financing term used across Foody Finance in plain English, one sentence each. Terms cover the 6 programs food operators use, the underwriting language lenders apply, and the restaurant metrics that decide what you qualify for. Each term has its own link you can share.
B
- 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.
- Also called: buildout financing, buildout and expansion.
C
- cash flow program
- Financing sized against your deposits rather than against a piece of equipment. Approval follows revenue, so a strong sales month helps more than a strong asset does.
- 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.
- 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.
- 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.
- covers
- The number of guests served. Lenders pair it with check average to judge how reliable a month really is.
- Also called: cover count.
D
- daypart
- A block of the day you sell into: breakfast, lunch, happy hour, dinner, or late night. Adding one is a revenue decision with an equipment and payroll cost attached.
- Also called: dayparts.
- 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.
- Also called: drawdown, draws.
E
- 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.
- Also called: equipment financing, equipment loan.
F
- factor rate
- A flat multiplier instead of an interest rate. Borrow 50,000 at a 1.25 factor and you repay 62,500 total, no matter how fast you pay it off.
H
- 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.
L
- 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.
- Also called: business line of credit, revolving line.
M
- 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.
- Also called: cash advance, MCA.
N
- net 30
- You deliver now and get paid 30 or 60 days later. Catering and contract accounts run this way, which is why the food cost is out of your account before the money comes in.
- Also called: net 60, net 30 to net 60.
O
- occupancy cost
- Rent plus everything the landlord bills on top: taxes, insurance, and common area charges. Lenders read it as a share of sales.
P
- personal guarantee
- Your signature promising to repay if the business cannot. Standard on nearly every small business program, including bank loans.
- plan review
- The city or county reading your kitchen drawings before you are allowed to build. Nothing gets installed until it clears, and rent runs the whole time.
- Also called: plan check, plan approval.
R
- remaining lease term
- How many years are left on your lease. Lenders want the loan paid off before the lease ends, so a short remaining term caps what you can borrow.
S
- SBA loan
- A bank loan partly guaranteed by the Small Business Administration. Lowest cost of the options, longest paperwork, and the slowest to fund.
- Also called: SBA financing, SBA.
- shoulder season
- The in between weeks on either side of your busy season. Sales fall while rent, insurance, and salaried payroll do not.
- Also called: shoulder months.
T
- term
- How long you have to repay. A longer term lowers the monthly payment and raises what the money costs in total.
- Also called: term length.
U
- 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.
- Also called: underwrite, underwritten, underwriter.
W
- 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.
Definitions describe how these terms are commonly used in food service financing. They are not legal or accounting advice, and they are not an offer of credit. Program specifics live on the financing program pages, and the published data behind every range lives on source and method.
Still not sure which program fits?
A specialist will translate your numbers into the programs you actually qualify for. Free conversation, no credit app, no hard pull.
- No credit application and no hard pull to start.
- A specialist reviews your operation before anything is submitted.
- Written offers only, and you can walk away at any point.