Business Loans – Getting Restaurant Financing Through Credit Card Factoring
Restaurants are thought to be one of the largest risk business industries. This makes it very tough for a new culinary merchant to attain needed business loans, both when beginning the business and when expansion or improvements are warranted. A entrepreneur could wait weeks or even months to hear back from the traditional bank, and in the time being, the business could possibly go out of business.
An additional option for attaining business loans is a merchant loan or merchant cash advance. These financial products fall under the category of credit card receivables factoring. Credit card factoring is a practice whereby a financier provides the small business owner financing in exchange for a lower rate on future Visa-MasterCard receipts. That translates as follows: the credit card factoring financier will give you cash in exchange for a percentage of your anticipated Visa-MasterCard revenues in the future.
Approval is often available within a day or two and the funds is in your bank account within about 10 working days – often less. No collateral is necessary since the product is based upon anticipated transactions.
Because the payment schedule is tied to actual sales, a poor month’s business doesn’t necessitate “creative bookkeeping” to manage a predetermined payment amount. The one condition is that the merchant must stick to the prearranged contract or the small business owner can be held accountable for repayment.
The fact is that many small business owners, particularly new ones, simply cannot meet the approval conditions set forth by the conventional banking industry. This doesn’t necessarily mean that the small business owner is doing poorly or that the entrepreneur isn’t trustworthy.
Most commonly the sole issue is the fact that the business is too new and has not had the time to establish a long reputation and credit rating. Obtaining restaurant financing through a merchant account factoring arrangement makes good business sense in these types of situations.
Since early 2008 Daniel Samoohi has helped thousands of business owners in finding trustworthy lenders in order to compare offers for business loans. By making lenders compete with each other, Daniel also helps businesses in finding great deals for business loans.