If you live in a busy town, you’ve probably seen plenty of restaurants come and go. The industry’s popularity certainly doesn’t make it any less risky. There’s just so many reasons for a seemingly promising restaurant to fail. Right at the top is seasonality, or the drastic fluctuations in revenue experienced by restaurants that peak during the summer or holidays. Seasonality makes it difficult to keep a sufficient amount of employees on staff for the busy and slow seasons. And much like the industry itself, restaurant employees tend to come and go at the drop of a hat.
Then there’s the ongoing need for equipment, which has a lovely habit of breaking down at the worst time for your finances. Your target market likely prefers locally-sourced ingredients and an expansive drink menu. They don’t know how much the price of either feature has risen as of late. Actually, they might not know you at all if you neglect to consistently market yourself ahead of your busy periods.
Assembling the basic requirements for success might not be such a challenge were it not for the industry’s notoriously low profit margins. Increases in rent prices, wages and benefit mandates have reportedly shrunk these profits even further. For even the busiest restaurants, saving money for growth-related investments is nearly impossible.
United Capital Source has many years of experience providing Small Business Loans for Restaurants, Bars & the Hospitality Industry. We can provide all types of business lending products. Contact us today for your FREE business funding consultation!
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Busy & SlowBanks frequently turn down applications for restaurant business loans solely because of the industry’s rocky reputation. But at United Capital Source, we offer small business loans that work around, not against, fluctuations in revenue or unforeseen expenses. A merchant cash advance is a highly-appropriate option for restaurants because a great deal of their customers pay with debit or credit cards. Since this is the primary requirement for eligibility, approval can be granted at virtually any point of your financial cycle.
Say you want to order inventory, increase staff, make renovations, or purchase equipment in preparation for a busy period. With a merchant cash advance, slow business wouldn’t stop you from making either investment at the most opportune time. A slow month simply means a low payment. The majority of the debt would be paid off when demand surges, even if there’s a few bumps in between.
This payment structure makes merchant cash advances similarly ideal for marketing campaigns, which must continue amid seasonality.
Several restaurant clients of United Capital Source use working capital loans solely to cover monthly expenses during slow periods. Extended bouts of unfavorable weather can make these periods last longer than expected. But restaurants must retain loyal team members as well as their relationships with key suppliers.
Paying suppliers on time is very important because it allows them to grow their own operations and continue delivering products. Should the cost of ingredients increase, we can develop terms that let you buy these ingredients at a rate that decreases pressure on profit margins.
A business line of credit is another sensible option for restaurants that often require extra cash for short-term needs. If equipment suddenly breaks or demand exceeds expectations, a business line of credit can quickly solve the dilemma since the means to pay off the debt will be coming your way shortly. Apply now to see how much you qualify for!
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