Already a major vendor when it comes to the restaurant tech stack, Toast is now getting into restaurant loans. Today, the Boston, MA-based company announced Toast Capital, a solution that provides restaurants large and small with fast access to funding for their business operations. According to a press release sent to The Spoon, Toast Capital loans will be available to eligible Toast restaurants in the U.S. as of December 2019.
The news comes at a time when the National Restaurant Association predicts that financing for restaurants will continue to be a major struggle over the next 10 years: Panelists also do not see it getting any easier in 2030 for restaurants to access credit or for operators to find financing, including through local independent banks,” the Association said in its recent “Restaurant Industry 2030” report.
The reasons aren’t surprising: restaurants operate on thin profit margins and their growth is often subject to all sorts of outside circumstances, from snowstorms to the threat of economic recession. Meanwhile, Toast’s own Restaurant Success in 2019 report notes that over half of restaurant professionals rank high food and operating costs as one of the main challenges of running a restaurant business.
To assist with that, Toast Capital offers a way to apply for loans without having to go through the weeks- or months-long process one normally would with a bank. Restaurants who are members of Toast’s community can apply online; upon approval, funds are deposited as soon as the next business day.
On its website, Toast says it factors in a restaurant’s length of time in business, sales history, and history as a Toast customer when reviewing applications. According to the press release, Toast also takes into consideration challenges that are specific to the restaurant industry, such as slower sales due to changing seasons.
Toast offers loans between $5,000 and $250,000, based on a restaurant’s application and eligibility.
The launch of Toast Capital also makes it clear that the company, which started out as a simple POS system and now offers just about every feature you could need to manage a restaurant, is determined to keep evolving. That’s a wise move on Toast’s part. With delivery changing the way customers get restaurant food, and which ghost kitchens potentially eliminating the need for many front-of-house tech features, restaurant tech management companies will need to find other ways to diversify and stay relevant.