Alternative Funding for Restaurants 2018 Made Easy

Getting funds for financing the fund requirements of a business is a great trouble for restaurant owners. The reason behind failing of most of the restaurants is the lack of working capital and startup. There is a need to have access to new capital with ease and have lots of alternative options to choose among them.

Merchant cash advance is a fantastic funding option for taking care of the cash requirements of a business. They are easier to get, more comfortable to repay and do not involve much paperwork and lengthy procedural formalities. Before choosing a source of finance, a person should always compare the various Alternative Funding for Restaurants 2018.

Small business owners and startup openers are usually not provided easy-loans by banks and financial institutions as they are not taken as a credible person who would have the financial capability to repay the installments on time. However, with the rise of various sources of Alternative Funding for Restaurants 2018, these issues have been taken care off. Through this article, all these sources would be discussed in detail. Continue reading to know more about it.

  1. Term Loans: A term loan is quite similar to the traditional loan that is extended by banks and other financial institutions. Also, many lenders offer this type of loan online as well. Just like the traditional loan, this loan has the same concept. The borrower gets a specific amount of funds, and the specific monthly payments are set in the form of installments till the borrower repays the whole principal amount coupled with the interest.

The term loans provided online usually have a higher rate of interest associated with them as compared to the offline bank loans. However, the online term loans are easier to get thus making them a better source of finance for funding the requirements of funds for a restaurant. Thus, term loans are a significant alternative Funding for Restaurants 2018.

However, when compared to a merchant cash advance, the term loan is not a good option since in the times of low business; a restaurant owner would still be required paying the fixed monthly installments. However, on the other hand, lender of merchant cash advance requires the lender to pay a set percentage amount out of the card sales. Thus in periods of low sales, the repayment amount automatically goes down.

  1. Lines of Credit in a Business: Among the various credit lines in a restaurant business, there are general types in this one. The first type is an unsecured line of credit that is like bank loans only but with a higher rate of interest. The second kind of a credit line is the Secured one in, which there is a requirement of any equipment that can be attached as collateral to the loan. The third type of a business line of credit is a short-term loan, which can be secured or unsecured and is the best fit for a new business’s cash requirements. Such a type of loan provides great alternative Funding for Restaurants 2018.
  2. Equipment Loans: The equipment loans are a prevalent source of funds as an alternative Funding for Restaurants 2018. It is the best type of fund for businesspersons that are looking out for cash to finance the purchases of new machinery, office computers, kitchen equipment, and even vehicles. A new restaurant requires a lot of assets and various machinery to help in the smooth functioning of a business.

A well-established one might want to expand its functions, maybe introduce a new variety of food or would want to expand the place physically. For such plans, funds are the basic necessity and equipment loans are custom made to fit the requirements. A restaurant owner should not pay the price of the new equipment outright; instead, they should finance it through a loan and collateralize the asset with the loan.  Doing this would raise the probabilities of getting the loan application accepted and would also help the borrower get the funds at a healthier rate.

However, for a new business that doesn’t have many assets to serve as collateral, it is a problematic situation. This clause can be dealt away with if a borrower goes for a Merchant cash advance. It is so because in case of merchant cash advance the lender does not require any collateral for getting the loan. Isn’t it great alternative Funding for Restaurants 2018?

  1. Invoice Financing: Another source of finance for funding the cash requirements of a restaurant in 2018 is Invoice Financing. It is commonly known as “receivables financing” or “accounts receivable financing” as well.

It is a fund arrangement against the cash due from the customers of a business. Invoice financing helps the restaurants in improving their cash flow problems, payments to be made to suppliers and employees, funding reinvestment plans, and various other purposes thus making it a useful alternative Funding for Restaurants 2018. The borrower of a loan for their restaurant pays a set percentage of funds from the amount indicated on the invoice to the fund lender. It is the charges for borrowing funds from the lender.

  1. Merchant Cash Advance: Among all these options, the one alternative that stands out among all is funding through Merchant cash advance. It is the best funding alternative, especially for a small restaurant owner. In this type of loan, the lender gives the borrower a certain amount of cash in exchange for repayment amounts financed through the credit and debit card sales made by the business in future. Merchant cash advances are quick and thus enable the borrower to have easy access to cash in as less as a few hours. Moreover, Merchant cash advances are unsecured and thus do not require any collateral.

Through this article, various alternative Funding for Restaurants 2018 has been listed and discussed in detail. Their pros and cons have been listed as well so that it is easier for a borrower to compare and choose the perfect kind of alternative Funding for Restaurants 2018 for them. Merchant cash advance is the most preferred option by a large number of businesspersons due to its great pros.


By | 2018-07-03T16:59:03+00:00 June 28th, 2018|Business Loan|