Merchant Cash Advance for Restaurants

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There are hundreds of thousands of restaurant owners in the United States, and getting funding is a challenging endeavor for essentially all of them, regardless of their level of success or credit – and even when looking to buy an existing restaurant. An upscale restaurant may enjoy excellent reviews and boast a full reservation list each night, but still need to replace outdated kitchen equipment or increase the number of employees on staff.

Similarly, a downtown restaurant may thrive throughout the area’s bustling tourist season, yet experience a dip in revenue during less popular times of the year. It is not possible to remedy such problems without money. However, funding various projects may put a squeeze on the restaurant owner’s cash flow, even though the end result is almost always an increase in profit.

For these and other reasons, most restaurant establishments require outside funding on an occasional basis, like a merchant cash advance for example. It is only extraordinary businesses that never need additional working capital for expansion, repairs, equipment, or renovations.

Restaurant Merchant Cash Advance – An Ideal Alternative to Bank Loans

Merchant cash advances for restaurants are a wiser choice than traditional loans for many business owners. This type of arrangement is a flexible form of borrowing, and is a particularly good alternative for proprietors searching for options that accommodate the ebb and flow of revenue experienced in the restaurant industry.

The merchant cash advance alternative provides business owners with the funds they require through a purchase of the restaurants future income from patrons, such as credit card sales. With this agreement, the business owner is simply paid a lump sum up front in exchange for a percentage of these future sales.

Business owners who choose this type of merchant cash advance as a financing strategy do not repay the debt the way they would be required to if a traditional loan was obtained. Rather, when future revenue is sold to the merchant cash advance company, the owner of the restaurant is not paying back a loan, he or she is simply delivering on a purchase previously made through credit card.

For this reason, many proprietors feel such an arrangement has an edge over conventional loans. This is likely because traditional loans require the repayment of the principal and interest, regardless of the current profit being made by the restaurant. However, accessing capital through a cash advance based on future receivables eliminates the stress and worry of finding oneself in a negative cash flow situation.

Additionally, there are usually limitations on how a borrower can utilize a business loan, making it a less desirable option than a merchant cash advance program, which is essentially always more flexible regarding the projects for which the funds can be used. Below are just a few of the ways restaurants can use merchant cash advances:


Whether one is the owner of an upscale dining room or a casual café, keeping the POS system modernized with more reliable ticketing processes and EMV-chip readers is vitally important to his or her success. Even upgrading bookkeeping and inventory systems can go a long way toward protecting profits and reducing costs. Updating the restaurant’s website and making it more mobile friendly are also projects for which a cash advance can be used to great advantage. Upgrades of this kind ultimately allow business owners to remain competitive in their fields.

Daily Operations

Reprinting wine lists and menus, replacing worn menu covers and check presenters, and purchasing new staff uniforms are also excellent investment options when money is received from a merchant cash advance. Engaging in local food festivals and offering special tasting dinners, as well as participating in community events to promote the establishment are also highly profitable strategies that require a lump sum of money to implement.

Front of the House Improvements

Virtually all restaurants must eventually replace glassware, silverware and china, as the appearance of these simple items can make or break customer reviews. Similarly, updating the establishment’s decor, tables, chairs, and flooring are expensive projects as well, but are highly necessary to the owner’s continued success in the restaurant industry.

A merchant cash advance can also be used to add an outdoor patio, expand seating, or even revise table layout to ensure optimum efficiency when seating customers. The proprietor may also want to increase his or her staff, or invest in a new product or menu that requires an upfront fee.

Cutting Back of House Expenses

Most business owners operating in the hospitality industry are also concerned with cutting costs in the back of the house. This includes upgrading water heaters, dishwashers, refrigerators, deep fryers, ovens and other appliances to high-efficiency models. This is another example of a project that ultimately saves the business owner money, but requires a lump sum of cash to complete.

Renovations may be necessary to keep the back of the house up to code or to improve storage areas and make the space safer and more efficient for the staff, thus reducing the number of potential accidents and injuries among employees.

Freedom to Improve and Upgrade Without Restrictions

With restaurant merchant cash advances, there are virtually no restrictions on what the proprietor can do with the money once the advance is finalized. Unlike small business loans for which there are often many hampering restrictions, business owners who opt for merchant cash advances can utilize the money for essentially any purpose. This includes stocking up on inventory, renovating, expanding, or using the money for payroll or as working capital.

Final Considerations

Merchant cash advances are not bank loans, nor are they similar to such arrangements. They are simply programs that allow the finance company to purchase a preset dollar amount of the restaurants future revenue. Arrangements of this kind provide an ideal way for restaurant owners to obtain money for which there is an immediate need, without the restrictions and complications associated with loans obtained from banks.

Regardless of whether one owns a fine dining establishment, a trendy café, or a casual eatery that serves homemade food, he or she has everything to gain and nothing to lose by pursuing a merchant cash advance and making positive and cost-effective changes to his or her restaurant.

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