What Is a Restaurant Cash Advance?
If you’re the owner of a restaurant business, you have probably heard a lot about restaurant cash advances. But because of an overabundance of information and misleading facts and figures, it can be difficult to understand how exactly this type of funding can help finance your restaurant or food service business.
How, exactly, does a restaurant cash advance work and what can it do for you?
For restaurant owners, receiving funding from a bank can be difficult because of the strict requirements they impose upon potential borrowers. Banks require that restaurant businesses pledge serious collateral or have a high credit score in order to be approved for a loan. The very nature of the food service industry makes it difficult for business owners to meet these requirements.
This is where cash advances (also known as credit card factoring) can help your restaurant business. If your food service business already has been open for at least 6 months and you accept credit cards – you are already qualified to apply to receive this type of funding for your business. You can even have bad credit and still be approved! The cash will be given to you in a rapid fashion – usually between 4 and 7 business days but sometimes even less. You can use this cash for any business-related expense and there are no requirements for how you choose to allocate your funding. Yes – this means you can use your cash for equipment, payroll, renovations, expansion, and more.
So what’s the catch? Nothing! The merchant cash advance company will take an agreed-upon percentage of your future credit card sales as repayment. This means that if you have a slow period, you don’t have to worry as much about repayment during that period. Cash advances are much more accommodating for the ebb and flow style of business that is typical for many restaurants. This is why this type of funding is particularly useful for the restaurant and food service industry, and why many businesses in this industry rely on credit card factoring to thrive.
Using a merchant cash advance is a guaranteed way to see your restaurant business grow and to provide you with the cash you need to take your business to the next level. Remember that you can use the funds you receive for a variety of purposes, giving you the independence and freedom that you value as a small business owner!
