Restaurant Revenue Based Funding — Variable Payments

Revenue based funding (RBF) is structured around a simple idea: your repayment should breathe with your business. Instead of owing the same fixed amount every Monday whether you did $40K or $14K the prior week, you pay a small percentage of each day's deposits. Strong week, larger payment. Slow week, smaller payment. For restaurants with material revenue variability — most restaurants — RBF is often the structurally correct choice.

Who Should Use RBF Instead of Fixed Repayment

Patio-season restaurants where summer revenue is 2-3x winter revenue; ski town and beach destination restaurants with extreme seasonality; restaurants with significant catering or events revenue that comes in lumpy quarterly chunks; new restaurants in their first 18 months where revenue patterns aren't yet stable; restaurants in markets with weather-driven traffic (rainy weeks crush dining revenue in many regions).

How the Math Actually Works

You receive an advance of capital. You agree to pay back a fixed total — say $130K to repay $100K (a 1.30 factor). Repayment happens through a small percentage of daily deposits, typically 6-15%. Your repayment isn't calculated as APR — it's a fixed total amount, and the speed of repayment varies with your sales. Strong sales mean you pay it off faster (which costs you nothing extra). Slow sales mean you pay slower (which doesn't cost extra either).

RBF vs. Toast Capital's Holdback Structure

Toast Capital's product is functionally a form of RBF — daily POS holdback. The differences with our RBF product: higher limits ($1M+ vs Toast Capital's typical $250K cap), no requirement to use Toast as your processor, and our holdback comes from your bank deposits (which include all revenue channels — Toast sales plus delivery platforms plus catering deposits) rather than only Toast POS volume.

The Risk RBF Solves

The biggest risk in fixed-payment funding during a tough period: you owe the same payment whether you did $50K or $20K that week. RBF removes that risk by tying payments to actual deposits. The trade-off: total cost is typically slightly higher than fixed-payment funding, because the lender is taking on more variability risk. For most variable-revenue restaurants, the trade is worth it.

How We Calculate Your RBF Offer

We model your trailing 12-month deposit pattern and project realistic repayment timelines. The percentage of daily deposits is calibrated so that, at your average revenue, repayment lands in your target window (typically 8-18 months). You'll see the math during underwriting, including expected repayment timeline at your average, your strong, and your weak revenue scenarios.