Selecting The Best Restaurant Finance Options
Restaurant finance options should not cause more stress for the owner. There are several options available, but the stress that is associated with them often causes the owner to seek alternatives. Through bank and credit card loans the options are either narrowed or of such high interest that it is not worth the trouble. Using merchant cash advances, these headaches can be avoided.
Every day restaurants struggle with the daily grind. Owners deal with balancing the cost of ordering supplies, paying employees, taxes, rent, and many other bills that come up. The last thing they want to worry about is where to obtain financing should a piece of equipment fail. Banks do not help relieve this stress and credit cards can cause more.
Traditional loan options are becoming a thing of the past. The amount of time a bank takes to process a loan often delays the possibility for an owner to seek other financing. If the loan is denied, it can result in a lost business. The loan also depends on the credit history of the owner, rather than the success of the restaurant. Credit card interest rates are extremely high and cause problems when trying to pay them off.
Using the merchant cash advance system, the owner is able to rely on how the business operates rather than his or her credit. The merchant company often provides the loan, or works with another company to do so. The paperwork is much easier because the relationship is already established. The credit card sales receipts are often the largest factor in determining the available loan amount.
Merchant cash advances make life significantly easier on restaurant owners. The cash loan is based on an average of six months worth of receipts. The longer the account has been open, the better rate the owner will receive. Unlike a bank loan, these are much easier to process and are almost guaranteed based on the history. Interest is also much lower than credit cards.
The terms for repayment are based on the loan size, length, and processing times. Often there is a fee of up to ten percent of the receipts to process the loan. The repayment is simply deducted from the credit card receipts before the money is transferred to the owner's account. This reduces the credit card receipts, but means the loan is being paid quickly and efficiently.
Using this system has become a win-win situation for the restaurant business. Since this industry is rather volatile, the owners have been punished with higher interest or impossible to obtain loans. This puts them into a situation where they have to survive based on the daily receipts. Using the merchant cash advance system, they are able to obtain the needed cash to remodel or upgrade equipment without having to beg for the money from a bank.
Restaurant finance options are not always available through the traditional methods. Rather than turning to high interest credit cards that could damage future finance options, the merchant cash advance option is one that provides the needed cash without having the high interest or difficult payment terms. This type of system was designed to benefit this industry and reward the efforts of those in it.