Merchant Loans for Restaurant Owners
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By :
David Castro
Submitted
2008-08-28 21:30:54 |
With over 945,000 restaurant locations in the United States (70 percent of which are independent restaurants) the restaurant industry is a booming part of the private sector. Restaurants in the United States employ over 13 million people, and annual restaurant sales total $558 billion. This may seem like an astounding amount of money, but restaurant owners are aware that it takes lots of funds and financing to produce a profit.
Just like all other types of merchants, restaurant owners want the best for their businesses and sometimes this can require money that the restaurant owner does not have on hand.
One of the attributes that make restaurants so unique is their offering of goods, services and sometimes entertainment all under one roof. A restaurant that provides an enticing atmosphere, friendly service and quality meals is almost guaranteed to bring in customers and make sales. Unfortunately, funding such an affair can be a difficult task.
A merchant loan can supply restaurant owners with the funds they desperately need, but struggle to attain. One type of merchant loan that is especially practical for restaurant owners is a merchant cash advance. A merchant cash advance can be used in many ways, from helping a struggling restaurant to maintain during a period of slow business, to financing the grand opening of a new location for an already existing restaurant.
Restaurants have daily costs that are typically higher than other types of merchant businesses. And often, a restaurant's gas water and electricity bills will reflect the inevitable usage of items such as dishwashers, refrigerators, freezers, ovens, and stoves. A merchant cash advance can be used to maintain these payments during times of decreasing sales, helping to keep the restaurant afloat until sales increase.
Also unlike other merchant businesses, restaurants purchase perishable goods. This means, if all of the goods that are purchased are not used within a certain period of time, they can go bad, causing the restaurant to lose money. A restaurant owner can recover that lost money through a merchant cash advance.
There are many other ways to put a merchant cash advance to use as a restaurant owner. It can be used for expansion, to finance promotions, or to purchase inventory such as utensils, dishes, cookware, or even food and drinks. You may want to try offering a new dish; a merchant cash advance can fund the purchase of the additional goods.
How does it work?
Merchant cash advances are formulated to work based on a business' credit card sales. Therefore, if your restaurant accepts credit cards, you are one step closer to being eligible to receive a merchant cash advance. Once the merchant cash advance is granted, a small percentage of the restaurants daily credit card sales is taken as repayment for the merchant loan. Therefore, the more often customers use credit cards, the faster the merchant cash advance is repaid. This is particularly advantageous for restaurant owners as based on a survey conducted by the National Restaurant Association in 1999, restaurants with average per-person dinner checks of $25 or more report[ed] credit-card use representing a median of 80 percent of sales, and by 2002 this number had increased. Also as the percentage of people who own credit cards increases, so does the usage of credit cards in restaurants.
A merchant cash advance is one of the most easily attainable merchant loans, and if you meet a few simple requirements, there are many lenders that are willing to provide a merchant cash advance to finance your restaurant. |
Author Resource:-
David Castro often writes articles about Merchant Loans and Restaurant Loans for Merchant Resources International - To Learn more Visit Us at http://www.cashprior.com.
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