A merchant cash advance may be a solution to your restaurant funding needs. Let's say you own a restaurant and have a great idea. It's a great idea in your mind and maybe others. Everyone but the bank thought it was a good idea. Your idea is to add a bar to your restaurant that would surely add revenue and after your calculations would conservatively net you a few thousand per month. So you bought your enthusiasm and great idea to the bank and I'll bet dimes to donuts you heard NO.
The fact is banks just are not lending, certainly not to small businesses. With record numbers of businesses closing, unemployment close to 10%, and default rates at high numbers, it is no wonder they are not free with the money anymore. It would be unfair to say they are not lending at all but the number of people that qualifies has gone down significantly and the requirements to qualify have put most people left out. Banks are typically looking for the following:
- Fico above 740
- Two years in business
- Two years tax returns
- Increase in business year over year
Wow. How many people have a 740 and how many have seen an increase?
So what are your restaurant funding options?
There are a few options but a very popular one today is something called a merchant cash advance. It is not technically a loan but an advance of your credit card receipts. These funding companies will take a look at your monthly credit card processing statements and find an average. The fund amount will usually be a percentage of that number. That% is usually around 100-120% but can be higher if you are in a cash heavy business like a restaurant. Merchant cash advance companies will also look at your bank statements for any glaring issues. The biggest concern are the NSF's. That tells them the cash flow is so poor you are having trouble meeting your obligations. If you had a few recently but have cleared up any issues then most companies will take that consideration and not penalize you for that. Throw in your business license, copy of your lease and that is about it. The process can be wrapped up from beginning to end in a few days. Oh and by the way, your fico only needs to be above 525 or so.
So if you are in need of cash for your business, check out a merchant cash advance.