Sometimes the most tense part of entrepreneurship is getting capital to maintain and sustain ongoing growth
. This is even more valid when you are seeking business loans. There is a misapprehension that restaurants are more likely to fail than any other niche; a ten percent success rate is often quoted.
The truth is that at the five-year mark restaurants have 40% success rates, nearly equal to all other types of businesses. Nevertheless, it can be tough to get financing, especially from traditional sources such as the local bank lender.
Business loans can also be acquired from merchant services vendors as a factoring agreement. These providers offer financing choices that range from a few thousand dollars right up to 250,000 dollars if needed. The entrepreneur is basically selling their future Visa/MasterCard revenues at a discount in order to get the cash that are necessary within days.
The business cash advance is repaid by way of a credit card factoring derived agreement. A percentage of credit card receipts are paid back based on a "Daily Capture Rate" that is worked out prior to getting the cash which means that during a slow business stretch of time the advance can still be paid without facing repercussions.
When you run a restaurant it can be tough to predict when you will need to have extra funds handy. Start up costs can be more than anticipated, and the first significant crisis can be a "make or break" event. Even if the business owner has excellent credit, it can take a long period of time for a bank loan to be approved; in the meanwhile, business continues to hurt.
Credit Card Factoring programs provide a much needed, quick solution for restaurants in need of funding. Neither collateral nor years of financial statement are needed to be considered for restaurant loans when you work with a reliable financing agent.