Don't Let Restaurant Loans Eat Away at Your Profits
Does your restaurant need more working capital? Before applying for restaurant loans from traditional lenders, there are risks that every entrepreneur should consider. Loans typically can result in long-term financing costs and require the regular remittance of payments on a fixed schedule. The failure to meet these payment deadlines can be catastrophic, and result in hefty fees and the potential of defaulting on the loan.
Now, imagine having the restaurant funding that your business needs to be successful. For over thirty years, Rewards Network® has been partnering with restaurants to provide access to innovative capital funding, while also increasing restaurant profits and promoting business growth.
Restaurant Loans Can Starve Your Business of Profits
Restaurant owners are often frustrated by the challenges of locating the capital they need for the growth and expansion of their business. Be weary of banks and other financial institutions that offer restaurant loans or other capital-raising gimmicks. In the words of Benjamin Franklin, “An investment in knowledge pays the best interests.” There are reliable alternatives available to restaurant owners who need financial assistance without the repayment risks associated with conventional loans.
Rewards Network offers loan-free alternatives for funding restaurants, bars, and other food service businesses. Our options include our Premier Restaurant Funding and Dining Credits programs that a provide merchant cash advance based on the purchase of future receivables in exchange for money now.
Feeding Your Restaurant with a Merchant Cash Advance
A merchant cash advance can provide restaurant entrepreneurs with flexible financial solutions for a number of possibilities: expansion projects, equipment upgrades, renovations, and other business expenditures. It is important to emphasize that cash advances are not loans. Every time a diner swipes a credit card with you, a portion of that sale goes back to pay the receivables purchased through our merchant cash advance Unlike a loan, the dollar amount involved fluctuates based on the ebb and flow of real time sales and remains affordable, even if the business experiences a slow season.
Is Your Business Hungry for Restaurant Funding?
The cornerstone of the funding programs we offer is to provide restaurants with working capital, as well as integrated access to targeted marketing and a comprehensive comment management system designed to connect you with your customers. In addition to capital funding, the benefits to restaurants include attracting new customers, brand loyalty, consumer metrics, and enhanced marketing. The effect of these powerful tools for restaurants is the ability to raise capital — and improve their business — without the need to use restaurant loans.
What a Small Business Loan Calculator Won’t Tell You
Financial lenders often provide access to a free online business loan calculator tool for entrepreneurs who are seeking information about the cost of loans. These virtual tools provide business owners with information about the amortization of interest as it affects the different loan variables such as interest rate, term, and amount of funds borrowed.
Using this tool, a prospective borrower can find out the estimated amount of their monthly payment before applying for a loan. The problem is that the information provided by a business loan calculator does not tell the complete story of the loan, and fails to provide information about the total loan cost.
A Business Loan Calculator is Not a Promise of a Loan
Sadly, it is not uncommon for a business loan applicant to use a loan calculator to determine their estimated loan payments, apply for the loan, and then be denied. Many lenders have an unfavorable disposition towards small businesses, such as restaurants, and even have policies that make qualifying for their loans difficult if not impossible.
A report by the Harvard Business School that was published in 2014 regarding post-recovery era credit access for businesses indicated that most lenders refuse to approve loans for certain businesses. These unlucky companies include businesses whose revenue threshold falls below $2 million, or that are within specific industries, such as restaurants.
Calculating the Benefits of a Merchant Cash Advance
A cash advance is a viable alternative for these businesses, and could provide restaurant funding for a local cafe or popular coffeehouse that could otherwise be unable to qualify for a commercial bank loan. Rewards Network takes the idea of the cash advance even further by partnering with its supported businesses to provide an entire suite of marketing tools and feedback systems that bridge the communication gap between restaurants and their customers. Our dining programs actually attract new customers to your restaurant, and effectively support a cycle of business growth and success. These benefits are not something that even the best small business loan calculator could compute.
Dynamic Restaurant Funding That Meets Your Needs
Restaurateurs, and other small retail businesses, typically experience fluctuations in their monthly profit earnings due to uncontrollable external factors such as climate, traffic patterns, tourism, and even the weather. Even financially healthy restaurants will undergo cycles of sales growth and retraction. These businesses require access to capital funding that can be remitted according to these financial variances.
A merchant cash advance, like that provided by Rewards Network, can meet these requirements. Cash advances can provide business funding through a process that involves the advance purchase of future receivables. A portion of future credit card sales then goes back to pay the receivables purchased through our merchant cash advance. This process provides additional working capital with the guarantee that the monthly payments are always affordable, because the payments are based on actual, and not forecasted, sales.
In fact, we have our own calculator that can begin to tell you a little more about how a merchant cash advance works with your current financial circumstances — far more than that of our competitors. Take a look.
The Lottery of Small Business Grants for Restaurants
Many budding restaurant entrepreneurs are attracted to small business grants because of the free access to capital for their restaurant business. But the reality is, the likelihood of receiving one of these grants is not that different from the chances of someone winning the lottery. Additionally, there are plenty of disadvantages to be considered before applying for grant funds.
The first challenge grant seekers face is that the process can be long, tedious, and vehemently competitive. While there are several types of grants available to small business owners, careful consideration must be taken before submitting applications. The majority of grants available are not simple monetary awards, and must be repaid as a business equity share or through payments.
Some grants are simply friendlier versions of restaurant loans, and even accrue interest that must be paid to the grant issuer. Most grants must be used for a specific purpose, and cannot be used as general working capital. Problems can also arise once a small business is approved to receive the grant. The funds from the grant can be withheld, revoked, or only partially distributed to the recipient if the terms of the grant are not satisfied. The result is that small business grants are often an unreliable method for restaurants to raise capital.
Are Restaurant Loans a Good Alternative to Small Business Grants?
Small businesses searching for capital funding will often apply for a loan. in the past, the restaurant industry has been considered a high risk investment for banks; therefore, it was difficult for these small businesses to even be considered for restaurant loans. But, the economic climate is changing and financial lenders are recognizing the growth and profit potential of restaurants.
The National Restaurant Association’s industry forecast for 2015 estimates that there will be over one million restaurant and food service locations throughout the United States, projected to collectively generate $709.2 billion in annual sales. These statistics demonstrate the financial juggernaut that the restaurant and food service industry currently represents. Lenders have been forced to reconsider their stance on lending to restaurants, but attitudes are often slow to change in the traditionally cautious lending industry.
How to Win with a Merchant Cash Advance
After years of https://rewardsnetwork.wpengine.com/rejection, restaurant owners have also realized that there are inherent risks associated with small business loans. The biggest problem with loans is that the funds must be repaid on a fixed schedule at a specified amount each month, or else the loan will default. These harsh payment schedules do not allow for variances in sales volume or seasonal fluctuations.
Fortunately, there are other alternatives for increasing cash flow, such as cash advances. Rewards Network offers restaurants a merchant cash advance and integrated marketing package designed to increase your profits. It’s a comprehensive program that focuses on funding business improvements and promoting your restaurant to a new wealth of customers, without the need for small business grants or loans. Contact us today to discuss how our programs can help you achieve your goals for your restaurant.
Why Pay for Restaurant Loans When Rewards Network has Better Options?
A better option than restaurant loans for many businesses is Rewards Network’s® Merchant Cash Advance, a program that not only includes up-front cash like restaurant loans do, but also marketing and customer feedback. A merchant cash advance is not a loan, and this highly successful system provides the cash to fund projects now — as well as ongoing restaurant funding in terms of cash flow, to keep that success rolling.
Experience and Connections
With 30 years of experience in the restaurant industry, we have the connections every restaurant owner needs. Rewards Network helps restaurants increase their revenue, traffic, and customer engagement using innovative financial and marketing services, in conjunction with the nation’s premier dining rewards programs. Your business gets access to capital, actionable data for real-time customer engagement, and promotional programs — all of which will enhance your top line.
With over 6 million members and growing, we offer these dining programs in partnership with major airline frequent flyer programs, several of the nation’s largest bank card issuers, numerous key players in the loyalty marketing industry, and dozens of national corporations. These are highly motivated diners who spend hundreds of millions of dollars annually at participating restaurants. One of those restaurants could be yours!
Choose from Two Programs to Get Cash
Rewards Network offers two Merchant Cash Advance options to get you the cash you need for improvements right now. You can select Premier Restaurant Funding, which gives you cash based on the pre-purchase of a percentage of total credit card sales at your location; or Dining Credits, where Rewards Network pre-purchases the credit card receivables of our member base alone.
Get So Much More Than Restaurant Loans Can Offer
Both Rewards Network programs help your business grow by providing immediate cash, as well as more customers who are proven spenders, including frequent flyers, corporate cardholders, and other highly motivated diners. We also provide a comment management system; multi-platform marketing that includes customized email messaging, social media, website advertisements, and mobile app exposure; and customized feedback and insights.
Choose the Option That Will Truly Improve Your Success
Unlike loans which continue to cost you money until they are paid off, Rewards Network’s unique programs will actually improve both your top line and your bottom line right from the beginning. It’s not just about getting cash. It is all about making your restaurant, bar, or club more successful over time. Don’t settle for short-term solutions when you have long-term options that will drive motivated customers to your business to increase your earnings, plus give you the tools you need to keep all your customers coming back. Check out how much more you get with Rewards Network before you get stuck with any restaurant loans.
Request a no-obligation quote today.
See how Rewards Network can help your restaurant go from surviving — to thriving — today.