Restaurant Merchant Cash Advances: Why They’ll Take Your Restaurant to New Heights

restaurant merchant cash advance

Owning and operating a restaurant is costly. Recent studies show that the median cost of opening a restaurant is about $275,000. This is about 15% more than what they expected to spend. Needless to say, many restaurants are strapped for cash.

If your restaurant is struggling with cash flow, getting some extra funding can go a long way. You could apply for a loan with the bank, but there is a lot of red tape that you’ll have to get through. More and more, restaurant owners are turning to merchant cash advances. This article will take a look at what they are and how they can help take your restaurant to new heights! 

What Is a Merchant Cash Advance? 

Many people are under the impression is basically a loan. This is NOT TRUE

A merchant cash advance is not a loan and is often a better choice for many restaurants. It’s essentially a flexible form of cash. Restaurant owners get the cash they need by selling a portion of their business’ future credit card receivables. In short, they get an upfront lump sum for a percentage of the sales they will make over time. It’s dependent on the volume of their future credit card receivables. 

Why Might Merchant Cash Advances Be a Better Option for Restaurant Owners? 

The unique nature and characteristics of merchant cash advances have made it a better option for many restaurant owners. These cash advances offer advantages like:

  • Lowered requirements. Many banks will require that restaurants hit a lot of milestones and benchmarks before offering them a loan. For example, restaurant owners may need to offer collateral for the loan. Or, they may need an amazing credit score. Merchant cash advance providers are usually willing to accept more risk than the banks. They typically won’t ask for any collateral or have any credit score requirements.
  • Fast and easy application process and turnaround time. Applying for a loan with the bank will take you a lot of time. Not only will you need to negotiate the terms and conditions, but you might need to wait months for the bank to process the application. Your restaurant might not have time to wait around. Merchant cash advances, on the other hand, typically only take several weeks to clear. 
  • Repayments based on revenue. Banks will require a repayment of a certain amount at a certain time. This can be fairly restrictive for many restaurant owners. Merchant cash advances are quite different. Repayments are based on the revenue of the restaurant. This can take a lot of stress off your shoulders.

There are many more advantages that merchant cash advances can offer. They are definitely a worthy alternative to explore if your restaurant is in need of extra funding.  

Apply For Your Fast Advance Today

If you need a little extra cash to fund your operations, you should highly consider Your Fast Advance. They can offer you a consultation on what steps to take next and can help you figure out whether a merchant cash advance is the right choice for your situation.

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