An Alternative to Searching For Business Loans
Sometimes the most tense part of running your own business is acquiring cash to maintain and sustain ongoing growth. This is even more true when you are looking for business loans. There is a misconception that restaurants are more likely to fail than any other business; a ten percent success rate is often quoted.
The actuality is that at the 5-year mark restaurants have 40% success rates, almost identical to most other types of businesses. Nevertheless, it can be difficult to acquire funds, especially from normal places such as the local bank.
Restaurant loans can also be obtained from credit card processing providers as a factoring contract. These vendors offer funding options that range from a few 1,000 dollars all the way to a quarter million dollars if needed. The business owner is basically selling their future Visa/MasterCard sales at a discount in order to get the money that are necessary immediately.
The business cash advance is repaid with a credit card receivables derived agreement. A percentage of credit card receipts are paid back based on a “Daily Capture Rate” that is agreed upon before acquiring the capital that means that during a bad business period the advance can still be paid without facing delinquency fees.
When you are running a restaurant it can be tough to anticipate when you will need to have a certain amount of cash available. Start up expenses can be more than anticipated, and the first major mistake can be a “make or break” event. Even if the business owner has impeccable credit, it can take weeks for a bank loan to be funded; in the time being, business continues to be bad.
Credit Card Factoring agreements give a much needed, speedy solution for restaurants in need of working capital. Neither collateral nor years of financial statement are necessary to qualify for business loans when you work with a reliable financing agent.
Author: Daniel Samoohi
Article Source: EzineArticles.com
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Tags: author daniel, business cash advance, business loans, credit card processing, credit card receipts, credit card receivables, local bank, restaurant loans, running your own business, speedy solution