Years before I got into the merchant cash advance industry I managed a restaurant. I have to say that managing a restaurant can be pretty stressful. It is very much a balancing act between offering good food and service and making a profit. Profit margins are very slim, and if you cut back on quality, the customers know it. That doesn’t give you much room to grow.

Banks are very apprehensive about loaning money to restaurants, mainly because so many of them don’t last more than the first year. It is true; getting past your first year can be a challenge. Most restaurant owners spend all of their money on opening the restaurant and don’t leave enough left over for marketing, upgrades or emergencies.

Having access to working capital can have a huge impact on the success of your restaurant. Many of the restaurants that failed last year would still be here today if they had had access to just enough cash to get them through.

If the banks aren’t going to loan them money, who is?

There is a business loan alternative that many restaurant owners have already taken advantage of. It is called a merchant cash advance (or merchant loan). Unlike a bank that turns down nearly 90% of small business loan applications; a merchant loan has an approval rate of 90% for most providers. This has opened the door for thousands of restaurant owners who though that they could never get funded.

Banks rely on good credit and collateral as the basis for lending money. With a merchant cash advance, all you need is a 6 month history of processing at least $2,500/mo in credit card sales. The more you process; the more you are eligible for.

The reason they are able to do this has a lot to do with how it is paid back. Rather than making out a check each month, a merchant loan uses your credit card processor to automatically deduct a small percentage from your daily credit card sales to pay it back. This automatic payback is effortless and has very little strain on your business. It is important for the advance provider not to advance you more than you can comfortably pay back. Your success is in their best interest as well.

What are the benefits for my restaurant?

You can use the money for anything you want. Other restaurants have used their advance for

• Advertising and marketing
• Kitchen upgrades
• Expanding their location
• Redesigning the dining area
• Getting caught up on bills

Other advantages include;

• High approval rate
• Easy application process
• Quick financing (usually in 7 days or less)
• Flexible payback structure
• 100% tax deductible
• Spend the money as you see fit