Merchant Cash Advance Cooking Up Profits
Author: Gerelyn Terzo
Date posted: 12.20.20

Jessica is the owner of a popular barbeque restaurant in the heart of the Austin, Texas tourism district. Like many businesses in the hospitality sector, however, sometimes equipment fails. Such was the case with her main oven. Jessica needed a lifeline, and time was of the essence. Major banks were not an option. After only a couple years of running the business, this entrepreneur didn’t have the credit she needed for a loan. Besides, Jessica rented her home and would not have real estate collateral to secure a bank loan. Fortunately, she had heard of a merchant cash advance, which perfectly fit the restaurant’s needs.

Jessica’s restaurant generates about $250,000 in monthly revenue, and she was looking to access about $50,000 in funding to pay for a new oven. Fortunately, the funding company was more interested in the historical performance of the business than they were in Jessica’s personal credit score. Besides, one thing a restaurant owner or any small business owner, for that matter, is short on is time. She didn’t have days, or weeks to provide all the documents that a traditional loan would require. Instead, Jessica was looking for something simple, and a cash advance met these requirements.

It came down to the restaurant’s sales, on which the business revenue advance would depend. If she qualified, Jessica would be selling her future sales at a discount, which was worth it to Jessica in exchange for receiving funds quickly and easily.

 

All she had to do was provide a few months of bank statements to the funding company so that they could verify revenue. Because she had managed things well, coupled with the fact that the restaurant had consistent credit and debit card sales, Jessica was approved for $200,000 she needed.

Although she only needed $50,000 for the oven, she thought she could use come additional money for other improvements as well as a marketing campaign. She decided to take the whole $200,000.

 

Jessica was also able to invest in a mobile food truck with a Tex-Mex menu sourced from local ingredients, which helped drive in more sales. Jessica would never have been able to stay afloat, let alone grow her business during this challenging time, without the funding she received from the revenue advance.

About The Author | Gerelyn Terzo

Gerelyn is a financial journalist who has reported for some of the top trade publications on investment banking, fintech and cryptocurrency. Gerelyn graduated from Campbell University with a B.A. in Mass Communications and currently resides in New Jersey.

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