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Funder comparison · 2026

Toast Capital vs Square Capital — who wins for what.

Both fund small businesses. They solve different problems. Here's the honest side-by-side, then five use-case verdicts so you don't have to guess.

By Fundnode Editorial7 min read

The specs

Toast CapitalSquare Capital
Product typeMCAMCA
Amount range$5K – $300K$300 – $250K
Cost (factor / APR)Factor 1.13 – 1.36 (single fixed fee, no compounding)Single fixed fee (10 – 16% of loan amount); no APR / no compounding
Speed to fund1 – 3 business days after approvalAs soon as next business day
Min time in business6 months12 months
Min monthly revenueToast POS volume drives offers — typically $10,000+/mo processed$10,000+ in Square card sales typical floor
Min credit scoreNo FICO floor — underwrites against Toast POS historyNo FICO pull — underwrites entirely against Square sales history
Products
  • Embedded restaurant working capital (Toast POS only)
  • Embedded seller working capital (Square sellers only)

Verdicts by use case

  • Restaurant running Toast POS as primary processor — Winner: Toast Capital. Toast Capital is structurally the right primary option for Toast POS restaurants — embedded in the Toast dashboard with pre-qualified offers, single fixed fee (factor 1.13 – 1.36), no FICO pull, auto-deducted as fixed % of daily Toast deposits. Switching POS from Toast triggers payoff so the lock-in is real, but for committed Toast restaurants the structural fit beats Square Capital (requires Square processing) and Clover Capital (requires Clover / Fiserv processing) which serve different POS-native segments.
  • Restaurant running Square for Restaurants as primary POS — Winner: Square Capital. Square Capital is structurally the right primary option for Square for Restaurants merchants — pre-qualified offers appear in the Square dashboard with no application, single fixed fee (10 – 16% of loan amount, no APR / no compounding — the most merchant-friendly headline pricing in the industry), no FICO pull. Square's underwriting model uses processing data directly, which often produces cheaper offers than Toast Capital's factor 1.13 – 1.36 for comparable file quality on Square. For Square for Restaurants merchants Square Capital is the structural winner.
  • Restaurant running Clover POS through Fiserv processing — Winner: Tie. Clover Capital is structurally the right primary option for Clover POS restaurants — embedded in the Clover dashboard via Fiserv / Clover Capital partner network with pre-qualified offers based on processing history, single fixed fee (factor 1.12 – 1.30 typical), auto-deducted as fixed % of daily Clover card-present batches. Tie at the category level because Clover Capital structurally wins for Clover restaurants the same way Toast Capital wins for Toast and Square Capital wins for Square — each is the embedded primary for its POS-native segment. The structural caveat: Clover Capital offers come from a partner lender network (less price-transparent than Toast or Square's direct origination).
  • Cheapest headline pricing structure across the three — Winner: Square Capital. Square Capital's single fixed fee (10 – 16% of loan amount with no APR / no compounding) is structurally the most merchant-friendly headline pricing in the embedded MCA category. Toast Capital's factor 1.13 – 1.36 translates to effective APR roughly 18 – 60% depending on file grade and repayment term. Clover Capital's factor 1.12 – 1.30 falls between Toast and Square on headline pricing but the partner-network origination means actual offers vary materially by which capital partner Clover routes the file to. For comparable file quality across all three POS systems Square Capital is structurally the cheapest headline structure; Toast Capital is structurally cheaper for restaurant-specific use cases where Toast's deeper data integration produces more favorable offers on the specific file.
  • Largest amount cap for high-volume restaurants — Winner: Tie. Clover Capital caps at $1M (varies by Clover volume), Square Capital caps at $250K, Toast Capital caps at $300K. For high-volume restaurants ($300K+/mo POS processing) needing $250K+ capital, Clover Capital is structurally the largest option among the three — but the partner-network origination means $500K+ deals often route to a partner lender with materially different terms than smaller Clover Capital offers. For $250K+ restaurant capital evaluate also traditional alternatives (OnDeck term to $400K, Credibly MCA to $600K, Fora Financial MCA to $1.5M) which don't carry the POS lock-in but cost more on headline pricing.

The honest takeaway

Toast Capital and Square Capital solve overlapping but distinct problems. The right choice depends on three things you already know about your business: how fast you need the money, how long you've been operating, and whether the capital need is one-time or recurring.

Frequently asked questions

How do I pick between Toast Capital, Square Capital, and Clover Capital — they all require their own POS, right?
Yes — all three are structurally tied to their respective POS / payment processors. Toast Capital requires Toast POS as primary processor, Square Capital requires Square processing, Clover Capital requires Clover POS via Fiserv processing. You can't pick the cheapest of the three independent of your existing POS infrastructure unless you're willing to switch processors (which triggers immediate payoff of any active embedded advance). As of 2026-06-28 the realistic restaurant embedded-capital decision is: (1) Identify which POS you're already running as primary — Toast, Square for Restaurants, or Clover. (2) Open the relevant dashboard and check for an embedded capital offer (Toast Capital tile in Toast dashboard, Capital section in Square dashboard, Clover Capital section in Clover dashboard). (3) If an offer exists, accept it as structural primary option for working capital — embedded offers are cheaper than any traditional MCA / LOC / term loan for the amounts typically offered and the revenue-aligned repayment fits restaurant cash flow better than daily ACH. (4) If no offer or the offered amount is insufficient, evaluate traditional alternatives (Credibly MCA for B-paper or fast funding, Bluevine LOC for clean-file revolving capital, OnDeck term for $200K – $400K capital events, Live Oak SBA for $500K+ documented expansion). For multi-POS restaurant groups (some locations on Toast, others on Square or Clover) the structural primary is typically the POS with the highest aggregate processing volume. Avoid switching POS purely to access cheaper embedded capital — the POS infrastructure cost (training, integration, hardware, menu setup) typically exceeds the capital savings within the first year.
Toast Capital, Square Capital, Clover Capital — what happens if I switch POS systems after taking an advance?
Switching POS triggers immediate payoff of the outstanding balance within 30 – 60 days depending on the specific embedded product. Toast Capital terminates the advance when you stop processing through Toast (switching to Square for Restaurants, Clover, Lightspeed Restaurant, or any other POS) and requires full payoff. Square Capital similarly terminates and converts to fixed daily debits when you stop processing through Square. Clover Capital terminates when you leave Fiserv processing. The practical implication for restaurant operators: don't take an embedded advance if there's any chance you'll switch POS systems within the repayment cycle (typically 9 – 18 months). For restaurants in active POS evaluation (considering Toast vs Square vs Clover vs Lightspeed), use traditional working-capital alternatives (Credibly MCA, Bluevine LOC, OnDeck term) for capital needs during the evaluation period — these are processor-agnostic so switching POS doesn't affect the financing. Once you've committed to a POS for the long-term (typically 3+ years), the embedded capital products become structural primary options because the POS lock-in becomes non-binding. For multi-location restaurant groups planning POS standardization (consolidating multiple POS systems to one platform across all locations) take embedded capital only on the final standardized platform, not during the migration period.
Which embedded option is cheapest in practice for a typical restaurant?
Square Capital is typically structurally cheapest in headline pricing (single fixed fee 10 – 16% with no APR / no compounding produces the most merchant-friendly cost structure), but actual file-specific pricing varies meaningfully across the three based on each platform's underwriting model and the merchant's specific processing data. Toast Capital's factor 1.13 – 1.36 produces effective APR 18 – 60% depending on file grade and repayment term — the low end (1.13) on clean A-paper Toast restaurants beats Square Capital, the high end (1.36) on B-paper Toast restaurants is materially more expensive. Clover Capital's factor 1.12 – 1.30 falls between Toast and Square on headline pricing but the partner-network origination introduces material variability — two Clover restaurants with identical processing volume can see meaningfully different offers depending on which capital partner Clover routes the file to. As of 2026-06-28 the realistic approach: don't pick the POS based on which embedded capital is cheapest — the POS infrastructure decision should be made on operational fit (menu management, online ordering, payment processing reliability, integrations, total cost of ownership). Within the POS you've already chosen, accept the embedded capital offer if it appears; if no offer or the amount is insufficient, layer in traditional alternatives. For genuine cost comparison across all three embedded options, you'd need to be a merchant who processes simultaneously through Toast, Square, AND Clover (extremely rare) and request indicative offers from all three — for the typical single-POS restaurant the comparison is academic because the merchant only qualifies for the embedded offer matching their existing POS.