How do I calculate my target?
Add weekly payroll, rent, food and beverage purchases, utilities, insurance and debt payments. Multiply by the number of weeks you want covered, often four to eight, and adjust for your slow season.
Restaurants with big seasonal swings need more. A restaurant with steady sales year-round can hold less. Use your own POS history to see the swing.
What raises the need?
Seasonality, catering with deposits that arrive late, gift card liabilities, aging equipment and rising food costs.
Gift card balances are money already received for meals not yet served. Treat them as a liability in your cash plan.
Equipment deserves its own line. A walk-in cooler, fryer or dish machine failure can cost thousands with no warning. Some restaurants keep a separate equipment reserve so a repair does not compete with payroll.
Review the target twice a year, before the slow season and before the busy one.
How do restaurants build working capital?
Set aside a percentage of weekly sales, control food cost and waste, and avoid using reserves for planned projects.
Planned projects such as remodels are better funded separately. Funding can also bridge while the reserve builds.
| Line | Source | Your figure |
|---|---|---|
| Weekly payroll | Payroll reports | — |
| Weekly food and beverage | Vendor invoices | — |
| Fixed costs per week | Rent, insurance, utilities ÷ weeks | — |
| Weeks to cover | Seasonality | 4–8 |
| Gift card liability | POS | — |
Worked example: a fast-casual concept short of target
A fast-casual restaurant averaging $135,000 in monthly deposits sets a target of six weeks of expenses and finds itself about $28,000 short after a costly winter. Using an illustrative factor rate of 1.20, $28,000 would mean $33,600 repaid over roughly 5 months: 105 daily payments of about $320.
That works out to about $6,720 a month, or 5.0% of the $135,000 this business deposits monthly, and the total cost of the money is $5,600. Bridging the shortfall gives breathing room while a weekly set-aside rebuilds the cushion.
For comparison, repaying the same $33,600 over 3 months would lift the monthly outlay to about $11,200, or 8.3% of deposits, and whether the faster payoff is worth that bigger payment depends on how steady your slow months are.
| Average monthly deposits | $135,000 |
|---|---|
| Amount funded | $28,000 |
| Factor rate (illustrative) | 1.20 |
| Total repaid | $33,600 |
| Cost of the funding | $5,600 |
| Term | about 5 months |
| Daily payment (105 payments) | $320 |
| Payments as a share of deposits | 5.0% |
Who this fits
Usually a fit
- Restaurants below their target cushion
- Owners with seasonal swings
- Operators with gift card liabilities
When another route makes more sense
- Restaurants with full reserves
- Owners without a savings plan
- New restaurants without deposits
What you’ll typically need
- Recent business bank statements
- P&L summary
- Business details
Frequently asked questions
Is there a standard number of weeks?
No; it depends on seasonality and risk.
Should gift cards count as cash?
Treat them as a liability since meals are owed.
Can funding build reserves?
It can bridge while the set-aside builds them.
What credit score do I need to fund a restaurant cushion?
For a restaurant cushion, owners with scores from 500 can be considered because recent deposits carry the most weight, and stronger credit usually earns a lower cost and a larger offer.
Cushion too thin?
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Updated October 6, 2026