What does working capital cover that other funding doesn't?
Working capital covers timing gaps and soft costs: deposits due before equipment ships, the weeks a kitchen is closed, payroll for cooks you don't want to lose, reopening marketing, smallwares and opening inventory. It is flexible because it isn't tied to one asset or one contractor bid.
Picture a full-service restaurant closing its kitchen for a hood and cook line replacement. The equipment is financed and the ductwork is on a term loan, but rent, insurance, utilities and the sous chef's paycheck keep coming while sales stop. That gap is where working capital earns its cost. Our guide to the real cost of a kitchen remodel shows how to estimate it from your own sales history.
How is working capital usually structured?
Working capital is usually a shorter-term lump sum repaid on a set schedule, sometimes daily or weekly, or through a structure tied to sales. Shorter terms and frequent payments mean the cost is typically higher than equipment financing or a longer term loan, so it works best for amounts you can repay quickly.
Before accepting an offer, look at three things:
- Payment frequency: daily or weekly debits feel different from a monthly payment during a slow reopening month.
- Total cost: compare the full amount repaid, not just the payment.
- Timing: arrange it before the kitchen closes, since a closed kitchen shows weak deposits.
If you prefer payments that move with sales, see revenue-based financing.
When is working capital the wrong tool?
Working capital is the wrong tool for large, long-lived assets or major construction, because short terms create heavy payments for things that pay back slowly. A new hood, a full cook line or a patio build usually belongs on equipment financing or a longer term loan, with working capital only for the surrounding gap.
It is also a poor fit when the real problem is ongoing losses rather than a one-time project gap; new funding won't fix a menu or labor issue. If you already carry daily or weekly payments, ask whether an option to lower your payment or stretch the term makes sense before adding a new project on top.
How much working capital should a kitchen project include?
Base it on your own numbers: weekly gross profit you'll lose while closed, fixed bills that continue, staff you'll keep on payroll, deposits due before other funding releases, and a cushion for inspection delays. Many owners find the gap is smaller than the project but larger than they first assumed.
- Pull weekly sales for the same weeks last year from your point-of-sale reports.
- Estimate lost gross profit for the planned closure, plus a slower first week back.
- List fixed bills: rent, insurance, loan payments, utilities, software.
- Add payroll for retained staff and reopening costs.
- Add deposits due before your other funding releases.
Then compare that total with the options on our funding solutions overview.
What do funders look at for working capital?
Requirements vary by product and funder; many look at time in business, monthly revenue and credit. Working capital decisions lean heavily on recent bank statements, because consistent deposits show a restaurant can carry the payment while the project is underway.
Apply while sales are normal, share a short explanation of the project and its timing, and be upfront about existing obligations. You can apply online in a few minutes, and a funding specialist will explain the payment schedule before anything is signed.
What you’ll typically need
- Short online application
- Recent business bank statements
- Driver's license for each owner
- Brief project description and timeline
- List of existing payment obligations
Frequently asked questions
Can working capital cover payroll while my kitchen is closed?
Yes, that is one of the most common uses. Keeping experienced cooks and managers paid during a short closure can cost less than rehiring and retraining after reopening. Estimate the payroll you plan to keep, and arrange the funding before the kitchen closes, while deposits still reflect normal sales.
Is working capital more expensive than equipment financing?
Usually, yes. Shorter terms, frequent payments and the lack of specific collateral typically make working capital cost more than equipment financing or longer term loans. That is why many owners use it only for the gap around a project, not for the equipment or construction itself.
How fast can working capital be arranged?
Working capital is often one of the quicker products to arrange. Some approvals come within a day or two, depending on documents and the size of the request. Having recent bank statements ready and applying before the kitchen closes are the two biggest factors you control.
Can I use working capital for vendor deposits?
Yes. Equipment dealers and contractors often ask for deposits before ordering or mobilizing, sometimes before equipment financing or a term loan releases. Working capital can bridge that timing. Confirm deposit terms, refund rules and delivery dates in writing before you pay.
What if I already have payments on the books?
Share them upfront. Existing payments affect how much new funding a restaurant can carry. If current payments are squeezing cash, ask whether an option to lower your payment or stretch the term fits before starting the project, so the new work doesn't strain daily operations.
Planning around a kitchen closure?
Apply online and see working capital options sized to the gap around your project.
Updated September 14, 2026 · Prime Kitchen Capital Funding Team