Merchant Cash Advance Is Not Like Restaurant Loans
Traditionally, the first stop for most restaurants looking for capital has been a small business loan. But what do you do if restaurant loans aren’t feasible for your circumstances? Some financing companies won’t work with newer businesses, and not every form of funding can be used for every purpose.
What is a merchant cash advance?
A merchant cash advance is not a loan, and is a better choice for some businesses. It’s a flexible form of cash for restaurants looking for options that accommodate the ebb and flow of business.
Merchant cash advance provides the cash you need through a purchase of your business’s future credit card receivables. We agree to pay you upfront in a lump sum for a percentage of sales you will make over time. Loans are generally fixed and not based on your actual sales. Our merchant cash advance product is based entirely on the volume of your future credit card receivables.
Businesses that choose merchant cash advance as a method of restaurant financing don’t pay back a debt the way they do when taking out a loan. When your future credit card sales are sold to the company offering the merchant cash advance, you aren’t repaying; you’re delivering on a purchase already made.
And you are only selling future receivables in exchange for cash when, and to the extent that, they actually occur. With restaurant loans, your business must repay the principal and interest amount borrowed no matter what the ebb and flow of your business looks like.
What can I use a merchant cash advance for?
The limitations on how a borrower can use a small business loan can also make that avenue of restaurant financing less than desirable. Merchant cash advance programs like those from Rewards Network are much more flexible in what you can use them to fund, including:
Front of house improvements
Purchasing new plates, silverware, or glassware
Updating floors, tables, chairs, and décor
Revising table layout for efficiency
Remodeling to expand seating or add an outdoor patio
Expanding your staff
Investing in a new product with upfront costs
Back of house expenses
Upgrading to high efficiency machines like dishwashers, refrigerators, and water heaters
Replacing equipment in poor condition, such as ovens, deep fryers, refrigerators, and walk-ins
Improving storage areas for maximum efficiency
Purchasing small wares
Upgrading safety conditions for your staff
Modernizing your POS system with EMV-chip readers and more reliable ticketing
Integrating your kitchen ordering system with your front of house
Refreshing your website or making it mobile-friendly
Creating a customer app
Upgrading your inventory or bookkeeping systems
Day to day operations
Getting a financial boost during slow periods
Reprinting menus and wine lists
Replacing worn check presenters, menu covers, and table tents
Purchasing new staff uniforms
Participating in community events that promote your restaurant
Offering special tasting dinners or engaging in a local Restaurant Week
How does our financing for restaurants work?
Rewards Network offers two different restaurant financing programs that use a merchant cash advance to help you fund improvements and maintain cash flow: Premier Restaurant Funding and Dining Credits. Both programs enable your business to receive a merchant cash advance it can “dine down” over time, based on the ebb and flow of your business, unlike restaurant loans.
Premier Restaurant Funding
This merchant cash advance option offers the opportunity to be approved for a larger funding amount and has a simple application and approval process.
We purchase a percentage of future total credit card sales at your location.
The amount of pre-purchased receivables is based on 5-9% of your total credit card sales.
You pay Rewards Network only when your business generates a credit card sale.
This merchant cash advance option is pay-for-performance. We market your restaurant to our members and are only paid when our loyalty program members dine.
We pre-purchase food and beverage for Rewards Network members only.
The amount of pre-purchased receivables is generally about 1.5-10% of your total credit card sales.
Payment is forwarded to Rewards Network as a percentage of the revenue generated from our members.
In addition, all the benefits of our Marketing Services program are automatically included when you participate in either of our merchant cash advance programs, including:
More customers: Rewards Network members represent a consistent 4-6% of our program restaurants’ overall revenue.
Increased loyalty: Connect directly with your customers through our comment management system.
Multi-platform marketing: Enjoy mobile web, email, social sharing, and banner advertising exposure — with no upfront cost.
Customized feedback: Receive in-depth survey and analytic data with insights that will help your business grow.
Do I qualify?
Business owners that would like to benefit from one of the restaurant financing options offered by Rewards Network must:
Be a sole proprietor, LLC corporation, or partnership.
Regularly accept credit cards for check payment.
Provide three months of business results.
Be located in the United States.
Rewards Network works with all restaurant types — casual, upscale casual, fast casual, fine dining, family, or quick serve — as well as bars and clubs. We’ve funded over $2.5 billion dollars to restaurants of all shapes and sizes looking for cash-flow friendly financing options that can be approved in as little as 48 hours.
Request a no-obligation quote today.
See how Rewards Network can help your restaurant go from surviving — to thriving — today.