What $2 of dining credit for $1 of cash really costs your restaurant.
The dining-credit purchase is the instrument owners argue about most and model least. Three numbers decide it: what a dollar of sales costs you to serve, how many of the diners it brings are new to you, and how fast the credit gets used. Put yours in and compare the bottom line with a bank.
per dollar of sales. Most full-service rooms land between 55 and 65 cents.
Your guess. Full on weekends and quiet midweek usually means 50–65%. Full every night means under 25%.
Per dollar of new-guest redemption. 25% is a cautious guess; owners who track it report 15–40%.
inKind credit tends to be used faster than owners expect.
Borderline. The money is more expensive than a bank loan and cheaper than a cash advance. Worth it for speed if the project can't wait; have your accountant check the new-guest share.
A dining-credit partner pays you the funding amount up front and receives twice that in food and beverage credit. Its app members redeem that credit at your tables and receive 20% back from the partner. Every redeemed dollar falls into one of two buckets.
A new guest. Someone who wouldn't have come without the app. Serving them costs you food and labor on that dollar of sales, and nothing else; the revenue already arrived as funding. If your food and labor run 58 cents on the dollar, a new guest's redeemed dollar costs you 58 cents.
A displaced regular. Someone who would have come anyway and paid the menu price. Their redeemed dollar costs you the full dollar of revenue you'd otherwise have collected; the food and labor were going to be spent either way.
Some new guests come back later and pay full price. We count that at your margin, times whatever return rate you think is realistic. Then we subtract the funding you received, divide by it, and spread the result across the months it takes to redeem the credit. That gives you a number you can set next to a bank's rate.
Two things it leaves out, on purpose: the value of being in front of the partner's members as marketing, and the chance that redemption bunches into your busiest nights. The first makes the instrument look better; the second makes it look worse. Your accountant can weigh both.
This is an estimate built on our credit-purchase partner's published model, not a quote or an offer of financing. The partner sets its own terms in a written agreement that carries redemption and default obligations. Have a lawyer read it.
The model says maybe. A two-minute questionnaire says what we'd arrange.
Four questions, two minutes, no credit pull.
Covers Advisory is an independent capital advisory, not a lender. We do not make funding decisions, and we are compensated by funding partners when a placement we arrange closes. Our recommendation is the same whether or not a partner pays us. How we're paid.