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Restaurant Financing In Short Supply During Recession
The stories are similar from Portsmouth, NH to Miami, FL, to Canton, OH and even Chicago. Restaurants aren’t immune from the economic downturn. Portsmouth, NH diners are reeling from the successive losses of three downtown area restaurants in the last week alone. One new restaurant, which barely made it to its first anniversary in Miami, has also closed.
Restaurant financing isn’t far from the minds of business owners these days.
One restaurant owner in Canton, OH is angry because recent parking meter increases that tripled the cost of street parking near her establishment, combined with the doubling of parking ticket fines, has cut into her business. In Chicago, more than 130 restaurants have banded together to participate in Chicago Restaurant Week. These high end establishments are putting on the dog when it comes to attracting new diners to their establishments. Diners will find great deals on luxurious lunch and dinner dining at substantially reduced prices, through February 27. Last year, a similar event increased sales by 20 percent.
While restaurant owners will tell you that the reason for closures is “not enough business,” proper capitalization also plays an important role. Businesses like restaurants need to be properly capitalized to build up repeat business, especially in hard times, when restaurant dining is one luxury that many people eliminate.
Rapid Capital Funding has a special restaurant financing program designed to deliver the cash restaurants need fast. If your US-based restaurant accepts Visa or MasterCard, is current on its lease and generates at least $2,500 in monthly credit card receipts, your restaurant is likely eligible for our special restaurant financing plan. You can get the cash you need now to cover payroll, buy new equipment, expand your business, pay unexpected expenses or just weather the downturn, and you can do it without incurring new monthly payments.
If you are interested in learning more about Rapid Capital Funding’s restaurant financing program, contact us today!
Photo Credit: Charles Thompson
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Bank CEOs Face Congressional Music On Business Loans
If you thought that the CEOs of the major domestic automakers had it bad, hold on tight because the bank CEOs whose firms received a slice of last year’s TARP bailout will be testifying in front of the House Financial Services Committee today. Lawmakers are expected to demand an accounting of what exactly happened to the bailout funds lavished on banks last year, and an explanation for why more of the Fed’s capital isn’t being plowed into
bank loans for businesses and consumers.
Congress has gotten more than an earful from ordinary people who wonder why the banks were not questioned as closely about the estimated $800 billion in TARP grants as automotive CEOs were grilled about their request for $25 billion in federal loans. Lawmakers will be looking for an accounting of how the TARP funds have been spent to date, and want answers about the excessively high bonuses that have been paid to bank executives since the TARP funds were released.
One burning question on the minds of lawmakers is how much of the funding has been offered to businesses and consumers in the form of loans. Among the nearly 400 recipients of the federal funds, only Citigroup has provided any information about how it has spent its TARP funding. Citi’s accounting shows that only about one-third of the money has been made available for loans.
Small businesses have been hit hard by the lack of capital available for operations and expansions in the last year. Nearly five percent of small businesses are now saying that loan availability is the single most important issue facing small businesses today. There is another source of funding for small businesses: a merchant cash advance.
Merchant cash advances are available to any US business that accepts Visa and MasterCard and has at least $2,500 per month in credit card transactions. Merchant cash advances have a limit of $250,000, so you can get the cash you need when you need it.
A merchant cash advance isn’t a loan. It’s a cash advance based on future sales. As your transactions are processed, your advance is repaid, with a small fee. There’s no monthly bill to pay, and 95% of all eligible merchants who request a cash advance get one. There’s no requirement that you have good credit, either.
If you’ve been the bank route and you’re still waiting for your cash, or you’ve been turned down by banks who won’t lend out their cash, don’t face the worst alone. Contact Rapid Capital Funding today!
Photo Credit: Chrisinphilly5448, via Flickr
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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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Need Access To Cash For Your Small Business?
While the final details of President Obama’s economic stimulus plan have yet to be worked out, some analysts are questioning whether there is anything of value in the plan for small business. Additional loan provisions and increased lending guarantees from the Small Business Administration are in the current package, but some fear that the plan will do little more than create additional governance without addressing the issue of
small business financing.
The potentially expanded powers of the Small Business Administration allow the government to be a buyer in the secondary loan market. While that may seem to stimulate the loan business, many analysts are skeptical about plans to saddle the government with extra debts, likening the new SBA to troubled mortgage guarantors Fannie Mae and Freddie Mac.
Instead, advocates favor extending small business tax relief, a move that is currently absent from the stimulus plan. In the short term, small businesses need cash for operations and longer-term growth. As credit markets tighten, the access to cash has become a major issue for small businesses.
One approach that more business owners are taking is a business cash advance. Based on future credit card sales, a business cash advance supplies access to readily available cash immediately.
Business cash advances aren’t like loans. There is no monthly payment. Instead, businesses can use future credit card sales to fund their current activities. Repayment of the advance occurs as normal credit card transactions for the business are processed. Depending upon average monthly credit card receipts, a business can take up to $250,000 in cash advances.
A business cash advance is a short-term unsecured debt, so there’s no collateral. About 95% of applicants are approved for an advance. To apply for a business cash advance, a business must be registered to operate in the United States, accept Visa or MasterCard, and have total credit sales of $2,500 or more per month.
If you are interested in learning more about how a business cash advance can help your small business, contact Rapid Capital Funding today.
Photo Credit: Kamil Dratwa
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