Parafin and SpotOn Enhance Capital Program to Improve Underwriting, Expand Access and Lower Financing Costs for Restaurants
Parafin, a financial infrastructure company specializing in embedded lending, has announced that its underwriting and capital platform now powers SpotOn Capital, the financing program integrated into SpotOn’s restaurant and financial technology ecosystem. The partnership is designed to give eligible restaurant operators improved access to financing, more competitive costs and faster access to capital.
The collaboration represents an expansion of the relationship between two companies focused on helping small and midsize businesses manage their financial needs. By integrating Parafin’s lending infrastructure into SpotOn Capital, restaurant operators can access financing through a program designed around their business performance and operating activity.
For restaurants, access to working capital can be critical. Operators frequently need financing to manage cash flow, purchase equipment, renovate locations, cover seasonal expenses, expand their businesses or respond to unexpected costs. However, traditional lending processes can involve lengthy applications, strict underwriting requirements and an emphasis on personal credit that may not fully reflect the health of a restaurant business.
SpotOn and Parafin are seeking to address some of those challenges through a financing model that evaluates business performance and revenue alongside other relevant factors.
Refinancing Can Reduce Financing Costs
One of the most notable outcomes of the partnership is the potential reduction in financing costs for restaurant operators who refinance through SpotOn Capital.
According to SpotOn’s internal data, operators who refinanced through SpotOn Capital in partnership with Parafin paid 35% less on average for their financing compared with their previous financing programs. The company said individual savings vary depending on business performance, financing products and specific offer terms.
In one example cited by the companies, a restaurant operator reduced its monthly payments by nearly 50% after moving to SpotOn Capital.
The figures highlight the potential impact that changes to underwriting, financing structures and capital costs can have on small-business operators. Lower financing costs can help businesses retain more cash for day-to-day operations and potentially allocate funds toward growth initiatives.
For restaurant operators, where margins can be affected by labor costs, food prices, rent, utilities and other operating expenses, managing financing costs can be an important part of maintaining financial flexibility.
The companies emphasize that the 35% figure is an average based on operators who refinanced from their previous capital programs into SpotOn Capital during 2025 and 2026. It does not represent a guaranteed level of savings for every customer.
A Faster Migration to the New Platform
SpotOn completed its migration to Parafin’s platform in two months. Importantly, the transition did not require merchants to change how they apply for or manage financing.
Maintaining a familiar customer experience can be particularly important when financial products are embedded within an existing technology platform. Restaurant operators using SpotOn’s ecosystem can continue interacting with financing through the platform they already use for their businesses rather than being required to navigate a completely separate lending system.
Behind that customer-facing experience, Parafin provides the infrastructure necessary to operate the financing program.
The platform handles underwriting and capital disbursement while also supporting servicing, compliance and broader program operations. This allows SpotOn to offer a financing product without having to build and maintain all of the underlying lending capabilities independently.
AI-Powered Underwriting Focuses on Business Performance
A central element of Parafin’s platform is its AI-powered underwriting model.
Traditional lending decisions can place substantial weight on personal credit scores. While credit history can provide useful information, it may not fully capture the operating performance of a restaurant or another small business.
Restaurants can have highly variable revenue patterns and may experience seasonal fluctuations, changing customer demand and different expense structures. An operator with a strong-performing business may not necessarily have a conventional personal credit profile that fits traditional lending models.
Parafin’s approach considers restaurant revenue and overall business performance as part of the underwriting process rather than relying primarily on personal credit scores.
The objective is to provide a more business-focused assessment of an operator’s ability to manage financing. By using business performance data, the platform can potentially identify businesses that traditional lenders may overlook.
This approach may also help create a more streamlined financing experience by using information already available through an embedded technology ecosystem.
Embedded Lending Within Restaurant Technology
The partnership illustrates the growing role of embedded financial services within industry-specific software platforms.
Instead of requiring business owners to leave the technology environment they use to operate their companies, embedded lending allows financing products to be incorporated directly into existing platforms.
For restaurant operators, this can make financing more closely connected to their everyday business activity. A restaurant platform may already process information related to sales, payments and other operating functions. That data can provide insight into business performance and potentially support more informed financing decisions.
SpotOn operates a technology platform designed for restaurants, combining financial technology with tools used to manage restaurant operations. By embedding capital into that ecosystem, SpotOn can connect financing with the broader financial and operational needs of restaurant owners.
Parafin provides the underlying lending infrastructure, allowing SpotOn to offer and operate the capital program without developing every component internally.
Improving Access for More Restaurant Operators
Another objective of the partnership is to broaden access to financing.
According to SpotOn, restaurant financing has historically involved several trade-offs, including slow approvals, inflexible terms and underwriting processes that may not adequately reflect how restaurants operate.
Doron Friedman, chief innovation officer at SpotOn, said that financing decisions should take a restaurant’s actual business performance into account.
“For restaurant operators, financing has always come with too many trade-offs: slow approvals, rigid terms, and underwriting that doesn’t account for how a restaurant actually runs,” Friedman said.
He added that SpotOn Capital’s approach with Parafin focuses on real business performance rather than relying solely on a credit score.
The goal is to allow more eligible operators to qualify for financing while potentially providing more competitive terms and faster access to funds.
For independent restaurants and smaller restaurant groups, the availability of financing can influence the ability to respond to opportunities. A business may need capital to purchase new equipment, make improvements, expand its workforce or open another location. Faster access to funds can be particularly valuable when an operator needs to act within a limited timeframe.
Reducing the Need to Build Lending Infrastructure Internally
For technology platforms that want to offer financial products, building a lending operation internally can be complex.
A lending program requires more than an application interface. Companies need underwriting systems, capital management, disbursement capabilities, servicing processes, compliance infrastructure and ongoing program management.
Parafin’s platform is designed to provide these capabilities as financial infrastructure.
By relying on Parafin, SpotOn can focus on its relationship with restaurant operators and the broader development of its financial technology platform while Parafin manages key components of the lending operation.
This structure can also give platforms greater flexibility as their financial products evolve. As customer needs change, a lending program may need to adjust its underwriting approach, financing products or operational processes.
Sahill Poddar, co-founder and CEO of Parafin, said platforms and their customers can have changing financial needs and that embedded financial products should be able to adapt accordingly.
“SpotOn saw an opportunity to improve its capital program for restaurant operators, and we’re proud to help them deliver lower costs, broader access, and a program that can continue to evolve,” Poddar said.
A Relationship Built Around Restaurant Businesses
The partnership is particularly significant because restaurant operators have financial needs that can differ from those of other small businesses.
Restaurants operate in a competitive environment with significant recurring expenses. Revenue can vary based on location, seasonality, customer traffic and broader economic conditions. At the same time, operators may need to make substantial investments in kitchen equipment, dining areas, technology and other physical assets.
A financing model that incorporates business performance can potentially provide a more relevant assessment of a restaurant’s financial position.
SpotOn’s technology platform gives the company a direct connection to restaurant businesses, while Parafin brings lending infrastructure and underwriting capabilities. Combining those capabilities allows the financing program to be integrated more closely with the businesses it serves.
Potential Benefits for Restaurant Operators
The enhanced SpotOn Capital program is designed to address several common challenges associated with small-business financing.
Lower potential financing costs: Internal data from SpotOn indicates that operators refinancing through the new program paid 35% less on average than under their previous financing programs.
Faster access to capital: The companies say the program is designed to provide eligible operators with faster access to funding.
Business-focused underwriting: Parafin’s AI-powered underwriting model evaluates business revenue and performance rather than depending primarily on personal credit scores.
Integrated experience: Merchants did not need to change how they apply for or manage financing following SpotOn’s migration to Parafin.
Operational support: Parafin manages underwriting, disbursement, servicing, compliance and program operations.
Together, these features are intended to create a financing experience that is more closely aligned with the realities of operating a restaurant.
The SpotOn and Parafin partnership reflects a broader shift toward embedded financial services, in which financial products are incorporated directly into software platforms used by businesses.
For small-business owners, the appeal of this model is convenience. Rather than searching for financing separately, operators can potentially access capital through a platform that already understands aspects of their business activity.
For technology providers, embedded lending can create an additional financial service for customers while allowing specialized infrastructure providers to handle complex lending operations.
The SpotOn Capital program demonstrates how this model can be applied within a specific industry. By focusing on restaurants and incorporating business performance into the financing process, the partnership aims to make capital more accessible and potentially less expensive for eligible operators.
The companies’ reported results provide an early indication of the potential impact. Operators who refinanced through SpotOn Capital during 2025 and 2026 paid 35% less on average for their financing than under their previous programs, according to SpotOn’s internal data. In one individual case, monthly payments were reduced by nearly half.
However, the companies note that individual results can vary based on a business’s performance, the financing product selected and the terms of the specific offer.
With the migration completed in just two months and without changes to the merchant-facing application and management experience, SpotOn and Parafin have established a new foundation for the capital program.
As restaurants continue to navigate changing operating costs and evolving customer demand, access to flexible capital can remain an important component of business planning. Through its partnership with Parafin, SpotOn is positioning its Capital program to provide financing that is more closely connected to restaurant performance.
The collaboration combines SpotOn’s restaurant-focused technology platform with Parafin’s lending infrastructure, AI-powered underwriting and operational capabilities. Together, the companies are seeking to provide restaurant operators with financing that is faster, more accessible and potentially more cost-effective while creating a platform that can evolve alongside the needs of the businesses it serves.
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