There is nothing unusual about a small business encountering unexpected expenses. In the culinary business, business cash advances can help keep the doors open while providing needed financing for repairs, new equipment or expansion, without the headache of applying for a traditional bank loan.
Traditional bank loans simply don’t meet the needs of every small business owner. For new ventures, small business owners with less than stellar credit and those that need a rapid approval and payout, conventional bank loans are not the best choices. In the period after the subprime mortgage debacle, few banks are quick to loan money to any small business owners, even if they are ideal candidates for funding. Luckily, merchant account companies are stepping in to fill the gap left by traditional lenders.
Business cash advances are not technically loans at all. Rather, they are a form of credit card factoring, where one company sells a portion of their future credit card sales in exchange for immediate financing. As long as the restaurant can show a history of several months where they take in a reasonable amount of credit card sales – usually between $2000 and $2500 per month at least– a credit card factoring arrangement can be reached.
The financing company is likely to require the restaurant to change their credit card machines so they can track sales, but that is a small inconvenience when compared to the ability to acquire needed financing quickly. It is advisable that the restaurateur ensure that the company with which he does business follows “best practices” standards before signing on the dotted line. As many financing companies have sprung up recently in response to the current economic climate so it is best to be sure you do not deal with those that are just trying to take advantage of a rising niche.
A business cash advance can be used to finance anything a small business owner needs. It is quickly acquired and with flexible repayment terms can make the difference between accomplishing a dream and shutting your doors for good.
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