A Small Business Loan Calculator Is Good for Figures, Not Good for Business Value
Imagine that you are a restaurant owner sitting at your computer. It’s late. You’re exhausted. You stare at a lending institution’s website and the free business loan calculator has created an amortization repayment plan. You know that to expand your business, you need a cash infusion. Unfortunately, the repayment plan for the low-cost cash loan paints a picture of daunting financial conditions. So, as opposed to a viable solution, the cash loan looks more like a gamble that may result in punitive results for your business, instead of a much needed cash infusion.
While a business loan calculator is good for generating figures, it does not take into account the true value of your business and therefore undervalues a restaurant’s future profitability. Therefore, it is not uncommon for a loan applicant to go through the process of using a business loan calculator, apply for the loan, and then be denied. As a result of the financial crisis and the recession, many banks are not as willing to offer financing in the way of start up business loans. As the economic environment recovers, small businesses have had to be more creative when looking for cash loans.
Although going to a bank is an option, start up business loans, especially in the lower dollar range, are considered high risk for most banks. Many lending institutions have an unfavorable disposition towards small businesses such as restaurants. As such, they have established policies which make qualifying for a cash loans difficult, if not impossible. On the restaurateur’s side, should one obtain a cash loan for their business, there are risks that every entrepreneur should consider. Typically, small business loans will result in long-term financing costs and require the regular payment on a fixed schedule.
The failure to meet these payment deadlines can be catastrophic. Penalties may be assessed, and there is the potential of defaulting on the loan. This is something a business loan calculator does not tell you. In lieu of obtaining a traditional small business loan for their restaurant, many entrepreneurs apply for small business grants due to the promise of free access to capital. While enticing, the reality is that the chances of receiving one of these grants is small. And this harsh reality causes many to retreat back to start up business loans.
Rewards Network Offers an Alternative to Cash Loans
Rewards Network offers alternatives to loans for funding restaurants, bars, and other food service businesses. We are in the business of a providing merchant cash advance, i.e. the purchase of future receivables in exchange for cash upfront. We understand business, the business of hospitality, and the business of service to people. So, before you settle on obtaining a start up business loan, let’s take a quick look at the current financial landscape.
Traditional Small Business Loans for Women
Without going the traditional route, where does a restaurant owner turn to in order to obtain a start up business loan? What are the alternatives to small business loans for women? The recent economic environment brought about changes in the industry. The good news is that the cash business is booming with alternate cash products. There are more options available than just visiting more traditional sites and going through the steps of the business loan calculator for a traditional cash loan. As a result, financial institutions are being challenged with the new ways modern entrepreneurs are able to apply for and receive funding.
This also includes an alternative to small business loans for women who need a small cash infusion rather than a cash loan. Women business owners may find obtaining start up business loans in the current economic climate to be too intimidating. This is another thing a business loan calculator does not tell you. Despite the clear success of women-owned restaurants, small business loans for women remain harder to come by than those for men, even when taking into account factors such as industry experience and credit score. Thankfully, there are reliable alternatives available to restaurant owners in need of financial assistance without the risks associated often with more conventional cash loans.
More to the point, a business loan calculator does not take into consideration the proper value of a hospitality-based business, regardless of the proprietor. Rewards Network offers merchant cash advances as a viable alternative to cash loans for women-owned businesses that otherwise may be unable to qualify for a commercial bank loan. By providing an alternative to small business loans for women, Rewards Network is able to provide more than just a merchant cash advance. We also offer an entire suite of marketing tools and feedback systems that bridge the communication gap between restaurants and their customers. There is not a start up business loan on the market that offers support to increase sales revenue. Lending institutions are in the business of making money from the interest on their cash loans, not assisting the restaurant business with integrated marketing packages.
Rewards Network offers a comprehensive program that increases cash flow by focusing on funding business improvements and promoting your restaurant to a wealth of new customers — without the need for small business grants or cash loans. We have established a dining program which attracts new customers, bringing increased traffic to your restaurant. This directly affects and supports a cycle of business growth and success. These benefits are not something even the best small business loan calculator could factor in. Is it even remotely possible this type of program is being offered with any of the small business loans for women available on the market?
The Solution to Start-up Business Loans
The restaurant and food service industry currently represents $709.2 billion in annual sales. While this is a staggering number, particularly in the current economy, attitudes have been slow to change in the traditionally cautious lending industry. As a result, restaurant owners have long been frustrated by the hurdles of obtaining the capital they need for the growth and expansion of their business.
Rewards Network is in the business of merchant cash advances for the hospitality industry. A merchant cash advance can provide restaurant entrepreneurs with flexible financial solutions to situations such as: expansion projects, equipment upgrades, renovations, and other business expenditures. This is how we operate: every time a diner swipes a credit card with a merchant, a portion of that sale is delivered to Rewards Network in recognition of the receivables purchased through our merchant cash advance. What this process provides is additional working capital with the guarantee that the monthly payments are always affordable, because the payments are based on actual sales, and not forecasted sales and services. Rewards Network does not offer start up business loans, nor do we offer cash loans.
Again, it is vital to emphasize that merchant cash advances, including those offered by Rewards Network, are not cash loans. Unlike a cash loan, where the amount of remittance is fixed, the dollar amount paid with a merchant cash advance fluctuates based on the ebb and flow of real time sales. In this way, the advance remittance rate remains affordable, even if the business experiences a slow season. With loans, payment schedules do not allow for variances in sales volume or seasonal fluctuations. This is another factor not taken into consideration by a business loan calculator: the ebb and flow of the restaurant business.
Every retail business, whether large or small, will experience fluctuations in their monthly profit earnings due to uncontrollable external factors. Even the most financially healthy business with an established track record will undergo cycles of sales growth and retraction. Restaurants are no exception and therefore require access to cash infusions with remittances reflecting these financial variances. A business loan calculator does not consider cyclical revenue streams. You will not find much payment flexibility when researching small business loans.
This is what makes the business model of Rewards Network attractive for restaurant owners, as our services have removed the inherent risks associated with cash loans.
Rewards Network Offers Two Non- Loan Cash Programs
Rewards Network offers the following merchant cash advance options:
Premier Restaurant Funding offers a merchant cash advance based on the pre-purchase of a percentage of total credit card sales at your location.
Dining Credits is a program where Rewards Network pre-purchases the credit card receivables of our member base alone.
Both Rewards Network programs provide fast access to cash. Since this is not a cash loan, we are not limited to focusing on interest rates and payment schedules. We are committed to the growth of your restaurant and its future profitability. Due to our extensive member base, we offer the opportunity to attract more customers who have a proven track record of hospitality spending such as frequent flyers, corporate cardholders, and other highly motivated diners.
Technology for both consumer access to information and for business operations has also changed. Rewards Network recognizes that mobile web exposure is crucial to our success and to the success of those we offer our services. In this day and age, a restaurant can thrive or die based upon its online media presence and reviews. There is not a cash loan that can save a restaurant from bad press. This is why we offer a comment management system, a multi-marketing platform that includes customized email messaging, social sharing, website advertisements, and mobile app exposure; as well as customized feedback and insights. A start up business loan simply cannot offer you that.
Start Up Business Loans Cost You Money, Rather Than Make You Money
Since Rewards Network does not offer start up business loans, we are able to offer immediate opportunities to improve both your top and bottom line. We also offer a comprehensive success plan to bring about substantive changes beyond the cash infusion. While it is possible to remain with the more traditional lending options, start up business loans are not meeting the needs of the modern restaurant entrepreneur. To be successful, don’t grasp for short-term solutions when Rewards Network can offer you long-term options that give you the tools needed to guarantee a repeat customer bases, as well as drive motivated new business to your establishment. For over thirty years, Rewards Network has been engaged in the restaurant growing business. Your success is our success. Why settle for anything less than long-term success?
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Restaurant funding from Rewards Network is flexible, cash-flow friendly, and can be approved in as little as 24 hours. Go from surviving — to thriving — today.