Cash Advances From Restaurant Merchants: Why They’ll Take Your Restaurant To New Heights
Owning and operating a restaurant is expensive. Recent studies show that the median cost of opening a restaurant is approximately $ 275,000. That’s about 15% more than they expected to spend. Needless to say, many restaurants are strapped for cash.
If your restaurant is having cash flow issues, securing additional funding can be of great help. You can apply for a loan from the bank, but there is a lot of paperwork involved. More and more, restaurateurs are turning to cash advances from traders. This article will take a look at what they are and how they can help your restaurant reach new heights!
What is a merchant cash advance?
Many people have the impression that this is essentially a loan. It is NOT TRUE.
A merchant cash advance is not a loan and is often a better choice for many restaurants. It is basically a flexible form of cash. Restaurant owners get the cash they need by selling a portion of their business’s future credit card receivables. In short, they receive an initial lump sum for a percentage of the sales they will make over time. It depends on the volume of their future credit card receivables.
Why might merchant cash advances be a better option for restaurant owners?
The unique nature and characteristics of merchant cash advances have made them a better option for many restaurateurs. These cash advances offer advantages such as:
- Reduced requirements. Many banks will require restaurants to meet many milestones and benchmarks before offering them a loan. For example, restaurateurs may need to provide collateral for the loan. Or, they may need an incredible credit score. Merchant cash advance providers are generally willing to accept more risk than banks. They usually don’t ask for any collateral or have credit score requirements.
- Quick and easy application process and turnaround time. Applying for a loan from the bank will take a long time. Not only will you have to negotiate the terms and conditions, but you may have to wait months for the bank to process the request. Your restaurant may not have time to wait. Merchant cash advances, on the other hand, typically only take several weeks to clear.
- Income Based Refunds. Banks will require a certain amount to be repaid at a certain time. This can be quite restrictive for many restaurateurs. Cash advances from traders are very different. Refunds are based on the restaurant’s income. It can relieve a lot of stress from your shoulders.
Cash advances from merchants can offer many other benefits. They are certainly an interesting alternative to explore if your restaurant needs additional funding.
Apply for your early advance today
If you need a little extra cash to fund your operations, you should strongly consider Your fast forward. They can offer you a consultation on the next steps to take and can help you determine if a merchant cash advance is the right choice for your situation.