Why is our financing better than restaurant loans?
Imagine this: you have a great idea for a way to make your business work better. Maybe it’s expanding your outdoor seating to accommodate increased summer traffic. Maybe it’s adding new equipment to your kitchen to help your staff be more efficient or so you can offer new menu items. But then you hit the wall.
How am I going to pay for it?
The traditional first stop for restaurateurs has been a small business loan, and that route is certainly available to some business owners. But what do you do if a loan isn’t feasible? With markets differing across the country, and banks accepting varying degrees of risk, the terms on restaurant loans are not always favorable to the business owner. They can, in fact, seem downright prohibitive.
But there’s another option. Financing from Rewards Network is not a loan, and is a better choice for some businesses. We offer the opportunity for restaurants to get the cash they need to make improvements that will help their business grow.
What’s the big difference?
The financing Rewards Network provides is in the form of a purchase of your business’s future credit card receivables. In other words, we agree to pay you upfront in a lump sum for a percentage of sales you will make over time.
Restaurant loans are generally fixed in both amount and payment, and not based on your actual sales. Our cash advance program provides financing that is 100 percent relative to the volume of business you achieve through credit card sales. Here are the functional differences of that distinction:
Approval on a merchant cash advance can be as fast as 48 hours, while small business loans can involve up to a 60 to 90-day approval process.*
Rewards Network financing also has an easier approval process than most commercial restaurant loans, which often require extensive business history to be compiled (among other requirements).
Many businesses that do not qualify for a small business loan qualify for a merchant cash advance through Rewards Network.
Businesses that choose Rewards Network as a method of restaurant funding 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 a loan; you’re paying a portion of your future credit card sales.
And you are only selling future receivables in exchange for cash to the extent that they actually occur. The payment budgets itself based upon your business, it ebbs and flows as your sales do. 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.
Length of term
The average term for completion of payments on Rewards Network financing programs is up to 12 months.**
Small business loan repayment is generally structured over a 5 to 10-year term.***
Monthly payments on restaurant loans are fixed and rarely vary from month to month. No matter how your month goes, you owe a set amount of money to the lender.
With our financing program, you will have payment terms based on a fixed percentage of your monthly credit card sales, but exactly how much money that is depends on your business’s success at any given time.
If you have a slow month, the payment of receivables purchased through our merchant cash advance is lower. If you experience a business boom, your payment is larger and gets you closer to fulfilling the merchant cash advance terms.
We understand that paying the purchased credit card receivables quickly is important to your business, and to help with that, we don’t simply advance cash. We also supply more customers to boost your top line.
Every participating restaurant in Rewards Network’s financing program receives automatic enrollment in our marketing program at no extra cost. With that, your restaurant is marketed to our exclusive dining loyalty members who spend 13% more on average per check than other customers.
We drive these customers through your doors without you having to lift a finger. There are no set-up fees, additional training, or software installation necessary. As a result, our restaurants see a consistent 4-6% of monthly revenue that they can count on.
More customers to actually grow your top line? That’s something restaurant loans can’t offer.
*Business News Daily **There is no fixed term for a merchant cash advance through Rewards Network. The estimated usage period in this example is typical, but does not reflect the actual duration (which could be longer or shorter) for completing payment, which is based on the merchant generating purchased credit card receivables. ***The Harvard State Bank and the Small Business Association
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See how Rewards Network can help your restaurant go from surviving — to thriving — today.