Restaurant Financing Is Key To Survival

The Wall Street Journal reported last week that industry analysts expect a surge of bankruptcy filings in 2009 as consumers reign in discretionary spending. Among those hardest hit are fine dining establishments and independent operators that may lack the restaurant financing needed to survive a downturn.

Sales at low-end fast-food restaurants like McDonald’s are increasing, as customers trade down from higher priced casual dining establishments. The fine dining sector shrank by 7.5 percent in 2008, and approximately 2.8 percent of the nation’s family dining restaurants also closed. According to industry estimates, about 80 percent of the casual dining restaurants are independently owned.

Analysts say that as many as 3 percent of the nation’s restaurants may close, with independent owners, bar-and-grill operators and small dining establishments bearing the brunt of the failures. Having a cash cushion is especially important for small operators, who can’t take advantage of the economies-of-scale that larger chains can.

Independent owners are being squeezed at both ends. With declining sales and tightened credit restrictions, many restaurant owners are not finding the cash they need to sustain their operations.

An alternative to loans or lines-of-credit is a business cash advance. The business cash advance isn’t a loan, but an advance payment of credit card receipts. US businesses that accept Visa or MasterCard and have sales in excess of $2,500 per month can qualify for a cash advance of as much as 1.5 times their total monthly average credit card receipts.

The advance is paid back as credit card transactions are registered, so there’s no monthly loan payment, either. Most applicants - about 95% - qualify for the program. If you’re looking for a fast cash alternative to loans in order to finance your restaurant business, contact Rapid Capital Funding today and ask about a business cash advance.

Photo Credit: Mark Altamero

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