Start a Restaurant

Sometimes the most difficult part of running your own business is attaining financing to maintain and sustain steady growth. This is even true when you are looking for restaurant finance. There is a misconception that restaurants are more apt to fail than any other type of work; a 10% success rate is often quoted.

The truth is that at the five-year mark restaurants have 40% success rates, virtually matching to most other types of businesses. Nevertheless, it can be hard to acquire financing, especially from mainstream sources such as the local bank lender.

Restaurant loans can also be acquired from credit card processing vendors as a factoring agreement. These vendors give funding arrangements that range from a few 1,000 dollars all the way to 250,000 dollars if needed. The business owner is basically selling their future Visa/MasterCard receivables at a discount in order to get the funds they need right now.

The business cash advance is repaid through a credit card receivables based contract. A percentage of credit card receipts are paid back based on a “Daily Capture Rate” that is worked out prior to acquiring the cash which means that during a bad business stretch of time the advance can still be paid without facing delinquency fees.

When you operate a restaurant it can be hard to predict when you will need to have additional funds available. Start up capital can be larger than expected, and the first large mistake can be a “make or break” occurrence. 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 meantime, business continues to hurt.

Credit Card Factoring options provide a much needed, quick solution for restaurants in need of cash. Neither collateral nor years of documentation are necessary to be considered for restaurant loans when you work with a proven financing company.

Author: Daniel Samoohi
Article Source: EzineArticles.com
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