Restaurant Finance Providers Offer Financing Through Merchant Loans

When you own your own restaurant there will be moments when you face the unexpected and find your establishment in desperate need of restaurant finance. Talking to the local bank or Small Business Administration office may be your first inclination, but don?t bother. Neither is really forking over credit at this time, and those that can demand so much paperwork and collateral that it isn?t a viable option for many small businesses.

How ironic that the very venues that are supposed to extend working capital don?t, but don?t despair?there is another possibility. Your establishment can secure restaurant finance with a merchant account loan through that tiny credit card terminal sitting on your counter close to the register. You got it, the credit card account can help you get financing when you need it. The flexible repayment schedule associated with the program is linked to your credit card volume and ensures that your payments will be sent straight to the funding company. Analyzing your past merchant statements institutions providing these merchant loans already know that you are doing great, and they are willing to help you move further by furnishing a merchant account loan.

This arrangement, called a factoring agreement, involves you selling the factoring company a percentage of your estimated credit sales in the future for capital now. Since they already know just how much you take in on credit sales each month, they know how little risk you pose. That means that you can access $5,000 to $1,000,000 for each location for urgent expenses.

The repayment terms that are arranged for your business cash advance is directly connected to your merchant account volume, so you should not have to worry that you will be overburdened. Furthermore, this is a short term advance which you will pay back in a 6 ? 12 months at most, freeing up that capital for a reinvestment when your establishment is ready to use it for something else.

Many companies extend business loans for small businesses. Although the program is the same for the most part, there are some significant differences among the companies. Namely, the cost of the funds and time frame in which you are expected to return the funds. Although there is not an interest rate or set term, there is a factor rate and a hold back % of your future credit card sales. Say for instance you qualify for a factor of 1.32%. This denotes on a $10,000 advance you will pay back $13,200 or $.32 on the dollar once it?s all said and done. As for the hold back, if it is 10% this requires the factoring company will take 10% of your future credit card sales each day until the advance is paid back. So on the above example, assuming you process $10,000 each month, you will pay back about $1000 per month. This would require a term longer than generally furnished. Realistically, your establishment will attain a hold back of 20% so that you pay $2,000 per month and are complete within 6 months.

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Source: http://www.newsdaily247.com/business/restaurant-finance-providers-offer-financing-merchant-loans/

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