According to leading merchant cash advance creditors, restaurants tend to take advantage of merchant cash advance funding more than any other type of business. This is because food service industries are predominantly well positioned to benefit from this product. In most cases, restaurant owners depend on quick access to working capital to act fast to the market shift and invest in the expansion of their business.
Restaurant funding on time
Restaurants are on always on the front lines of the service sector, subject to the ever varying tides of client demand. For this reason, surviving in the unpredictable food service industry largely depends on agility. The capability to seize new opportunities while evolving with the times distinguishes the perennial dining favorite from the fleeting hot spot. As a restaurant owner, merchant cash advance will help you in keeping the pace with marketplace by forestalling emerging trends and tastes. Instant access to funds enables restaurant owners to:
- Purchase new equipment from kitchen appliances to computer systems
- Upgrade restaurant décor and design
- Establishing new location
- Hosting a promotional event
- Help to cater for daily expenses when sales are slow
- Marketing and advertising campaigns
Note that instant working capital helps restaurant owners to maintain their business and keep their tables filled.
Why the merchant cash advance works best for restaurants
Merchant cash advance firms provide instant and easy access to business financing that restaurant owners need to stay competitive. Merchant cash advance loans are mainly a perfect alternative for restaurant owners, not just because this type of business cannot be funded by the bank, but also because of the instant liquidity and simple process.
Low bar entry
Merchant cash advance providers are more likely to accept restaurant financing applicants than traditional banks. In most cases, banks tend to think that food service is a high-risk industry. For a restaurant owner to qualify for a commercial loan, they have to offer collateral and have strong credit scores. Typically, startup restaurants are faced with difficulties of meeting commercial lender credit qualifications. Merchant cash advance lenders provide funds without asking for any collateral or credit requirements. Businesses applying for merchant cash advance for restaurants are assessed based on the previous credit receipts and the minimum duration in business.
Usually, traditional small business bank loans tend to take several months to clear, if you qualify to get the loan. On the other hand, merchant cash advance normally takes 14 days to clear.
Easy and fast application process
Not so many restaurant owners have the time or financial skills to negotiate lengthy restaurant loan applications. A merchant cash advance has a simple and straightforward application process. Merchant cash advance lenders will only request you to provide a report of credit card receipts of previous months.
Revenue based repayment
Food service industry is subject to a continual recede and flow of business volume, based on seasonal market shifts, emerging trends, and many other aspects. Even though small business loans needs a fixed interest rate and repayment schedule, the merchant cash advance payment is calculated as a percentage of credit card sales. The merchant cash advance lenders effectively purchase a monthly portion of the future credit card receipts.