Are you a restaurant owner looking for same day funding of your business? Is there an emergency where you need money faster than waiting for the banks? Restaurant working capital might be the answer.
There are over a million restaurants in America. However, over 120,000 died last year alone. Restaurants were the hardest hit, as you know, and we are committed to helping every restaurant owner survive and thrive in the years to come.
What is Restaurant Working Capital?
Restaurant working capital is the amount of money you have between the assets and liabilities of your company – basically, the cash flow your business has to pay bills or make repairs.
Most restaurant businesses don’t have a lot of working capital. The rule of thumb with restaurant working capital is to have enough to run your restaurant for six months. If you have less than that you might have to get funding or bring in private investors.
However, most restaurant owners don’t have time to wine and dine private investors to bring in private investment, so they turn to business cash advances and merchant cash advances.
What is a BCA and MCA Advance?
A merchant cash advance is a short term business advance that usually is paid back in a year or less. It is a popular alternative to banks because it doesn’t require any collateral, perfect credit, or waiting a long time to get the funds.
A merchant cash advance will take from your future credit card transactions a small percentage to pay back the advance. Business cash advances, on the other hand, are paid back through automatic ACH withdrawal from your general business checking account sales.
Both MCA and BCA advances use factor rates instead of interest rates and typically vary between 1.19 to 1.49 typically which is the times amount you’ll pay back.
For example, if you borrow $10,000 and take 60 days to pay it back at a factor rate of 1.29, that means you’ll pay back a total of $12,900 i.e. 1.29x.
Using a Business Advance to grow your Restaurant
Having worked back-of-house myself for 20 years, I understand how capital intensive restaurants are. I used to do inventory and ordering for a few restaurants and we were always replacing mop heads, egg pans, deep fryer oil, and the list goes on.
So, the most income-producing thing you can do to insure the success of your restaurant is to make sure all equipment is running properly. I worked in a restaurant where the broiler never got hot which slowed cooking times down by 20%, which angered not only the cooks but the customers. Too many negative reviews on Yelp or Google reviews can ruin a business.
So, not only do you need to repair and replace equipment, but you need to upgrade your staff and start getting 5 star reviews from customers. You can use part of your restaurant working capital to hire a social media marketing specialist who not only helps you with your website, but can also brand you on Youtube, Instagram, and TikTok.
Most businesses have created a strong presence online, because they know most people are looking at everything online. It would be wise to use some of your advance to start bringing awareness to your brand asap.
Applying for Restaurant Working Capital
The best same day capital for your restaurant begins with filling out a 5 minute application. Again, the requirements are straightforward: 6 months in business, $5,000 a month in revenue, and 450 credit score. The most important factor is cash flow. If you are not making any money, chances are most MCA lenders won’t lend to you.
APPLY HERE (no hard credit check) View your offer and accept it or decline it.
We are committed to helping every restaurant make it in America. We take it very personally when we see a restaurant close down in our town and city because we are business owners ourselves. I wish you all the success in the world and I hope this article gives you some hope. God bless and stay prosperous! It will only get better from here.
Erik C. Johnson
Independent DAC Agent