While over the course of history, the precise definition of a merchant has varied, the one constant is the handling of goods and trade. Today, the question of “what is a merchant,” is still answered very much the same. It all about being an expert on the goods and services they deal in.
Rewards Network takes a similar approach in providing capital and marketing services to the restaurant industry. We hold ourselves to a high standard. We operate differently than companies that offer small business startup loans. Yes, some small business loan debt can be an option for a business to consider. Rewards Network offers an alternative and holds itself to a high standard in providing services to the restaurant industry. Our comprehensive program that not only provides cash infusion, but also offers opportunities to increase cash flow. We do this by focusing on providing capital and promoting your restaurant to new customers.
Rewards Network does not offer small business startup loans. We offer restaurants an alternative to small business loans that gives them the cash infusion they need and marketing and information tools focused on growing business. This alternative is a merchant cash advance. While there may be other companies who offer similar merchant cash and capital services through either a merchant cash advance or a small business loan, an entrepreneur who is in the startup phase of a business needs to consider carefully whether they are the best option in the long-term.
Important Questions You Should Ask
Consider the notion that the “merchant is held to a higher standard of duty of care.” It’s vital that several questions are answered before embarking in any business venture. You don’t just secure a small business startup loan and race to open the doors of a restaurant. As a merchant of high standards, every entrepreneur must think in terms of how their decisions impact their community, their local economy, and their clientele.
The reality is this: while Rewards Network takes a comprehensive approach including capital and marketing to business, many other merchant cash and capital companies seem more focused on writing small business loans rather than helping an establishment take its successful first step. The growth of any business is dependent on several factors. Beside maintaining cash flow, it is important to see the big picture and find answers to the questions that will keep a restaurant’s doors open long into the future.
So let’s take a look at what to ask after that initial question of, “What is a merchant?”
It is Less About Small Business Startup Loans and More About Building Community
Community is important in the success of every business and Rewards Network believes in helping our clients establish positive relationships beyond the initial startup phase. Every restaurant is an integral part of any community, potentially shaping its identity in a positive manner. So, with this in mind, we encourage our clients to ask the following five questions centered around: “what is a merchant?”
Question #1: What is a merchant’s responsibility to the community?
The most obvious service a business owner provides, particularly for the hospitality industry, is growth in the economy through job creation. According to the U.S. Small Business Administration, small businesses have added 66 percent of all new jobs since the 1970s. Small businesses frequently obtain small business startup loans. They can also create employment opportunities for any number of underemployed individuals in the community.
This includes the construction trades, and professional services for architects, commercial contractors, electricians, HVHC contractors, plumbers, landscapers and the finishing and decorating trades. Once the business is created, the restaurant will offer employment opportunities for cashiers, servers, chefs, prep cooks, line cooks, dishwashers, and bar staff if the need is present. Ask yourself if a lending institution who writes small business loans think on such “big picture” terms. Also ask yourself, is every merchant cash and capital company focused on the success of your business as a whole?
Question #2: What is a merchant’s value to their community?
The answer is simple: community investment. When money is spent, it generates local taxes, which is revenue that stays in the community. This revenue goes toward infrastructure that benefits the community, such as road construction, school revitalization, and municipal beautification projects. These are amenities that your clientele cares about. While a small business loan has its benefits, it does not necessarily reach far beyond initial cash infusion.
Companies that offer small business startup loans are not always concerned about impacting the local economy. For Rewards Network, which has worked with restaurants for over 30 years, it is about impacting the community. It is estimated that for every $100 spent in locally owned stores, $68 returns to the community. So, when a clientele transacts business in a restaurant, they are truly supporting their local community and ensure it remains a great place to live. When it comes to generating revenue, the question of “What is a merchant,” brings with it a wider and more tangible responsibility.
Question #3: What is a merchant’s value to their clientele?
There is a phrase used among local businesses: third places. A third place is an establishment where locals gather, a place to frequent after work and before heading home. It is a public space where people can come together, visit with friends, and make new acquaintances. Third spaces are important for community engagement and establishing a sense of place within the community. Any cafe, bookstore, coffee shop, bar, and or other small businesses can function as third spaces within their communities. They are an integral part of every community. Many merchant cash and capital companies that provide small business loans are not willing to support the concept of “third places” as a venue for community growth.
Question #4: What is a merchant’s value to other business owners?
The most concise answer is a diversity of products and services. When dining in a corporate restaurant, you know exactly what to expect — and there is a comfort to that consistency of experience for consumers. However, what if there are several smaller businesses in your community, too? Asking the question, “what is a merchant,” as it pertains to its relationship with other businesses, offers the potential for a wider variety of offerings and local networking. One benefit of a thriving local business community is a great diversity of products because there are local owners working in local sales strategy that can support each other. As a result, small business owners bring their own interests and insight to their stores, that add to a bounty of unique points of view in the restaurant industry.
Question #5: What is a merchant’s responsibility to their clientele?
Ultimately, it is about personalization and reflecting the tastes and needs of your local clientele. This is how the restaurant entrepreneur is able to communicate unique value to the local community. Rewards Network sees the big picture. We are about growing businesses that enhance the value of the community. Other merchant cash and capital companies may focus on writing small business startup loans and do not necessarily consider these five questions.
Our Easy-to-Access Merchant Cash Advance Options
Rewards Network does not offer small business loans, nor are we in the market of providing small business startup loans to jumpstart a local business. Instead, we offer two easy-access merchant cash advance options:
Premier Restaurant Funding – designed to provide faster access to capital than most small business loans. We provide a cash advance and pre-purchase of a portion of your total future credit card receipts at your restaurant.
Dining Credits – designed to provide access to capital where your payments of purchased receivables are based only on the credit card sales to Rewards Network members.
What they both have in common is that your payment is based on your restaurant’s sales, and both come with a commitment from Rewards Network to providing ongoing marketing.
Where Rewards Network and Other Merchant Cash and Capital Companies Differ
Traditional lenders are in the business of writing small business loans. By contrast, Rewards Network offers cash advances to purchase a percentage of future sales. In addition, we offer entrepreneur friendly terms. Other merchant cash and capital companies who offer small business loans may not.
Many merchant cash and capital companies require that a business be operating for a minimum time period, have minimum monthly credit card sales, and/or minimum gross monthly , revenue. Some, but not all merchant cash and capital companies provide small business startup loans in addition to merchant cash advances. They offer small business loans which are typically paid back by the borrower through fixed monthly payments over a definite term. The structure for small business loans does not always fit the ebb and flow of cyclical sales. Nor do they offer the potential to improve your business through marketing.
Paying Rewards Network is as easy as the simple swipe of a credit card by your customer. Every time a diner swipes a credit card with one of our merchant cash advance clients, an agreed percentage of that sale goes to pay the receivables we purchased through our merchant cash advance. Your payments of purchased receivables to us are based on actual sales, not forecasts.
Merchant cash and capital companies who provide business loans do not operate in this manner — because they typically require a fixed monthly payment, your monthly payment could exceed your sales. There is little difference between this model and securing a small business loan from a local lending institution. What is a merchant to do when faced with this challenge?
Rewards Network does not have fixed payment schedules as there are with small business startup loans. There are also no interest rates as there are with small business startup loans. Ask yourself whether or not a merchant cash and capital company that offers small business loans is able offer a program that matches what Rewards Network has to offer. In today’s economy, every entrepreneur — particularly one in the hospitality industry — must become all things to all people in order to succeed within their chosen community. It is not enough to open the doors. An entrepreneur must contribute to the growth and vitality of those around them. In order to do so, it all begins with the simple question: What is a merchant?
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