Merchant Cash Advances for Hospitality Businesses

The hospitality business has faced unique obstacles in the previous years because of COVID-19-related restrictions, worker shortages, elevated inflation, increased operational costs, and decreased consumer spending. As such, hospitality entities are confronted by constant stress on their cash flow projections.

For Food Service Operators such as: restaurants, cafes, bars and other hospitality venues, the challenge of generating stable cash flow has become more challenging because traditional lenders offer limited options with long approval times; strict eligibility criteria based upon credit history; and a fixed repayment schedule. All of these obstacles make it harder for entities that operate in an ever-evolving and unpredictable market to access capital.

Merchant Cash Advance solutions offer business owners of hospitality and food service establishments a fast and flexible capital solution to the cash flow challenges they experience on a daily basis.

The Current State of Hospitality Businesses

The hospitality industry has always operated with a very low profit margin. The combination of rising rent or lease costs, increasing utility bills, ingredient/food costs, employee wage increases, and fluctuating customer demand makes it extremely difficult to continue operating effectively.

Many hospitality operators experience the following common circumstances:

• Revenue fluctuations due to weather and/or seasons;
• Delay in receiving customer payments after services rendered;
• Repairing broken equipment unexpectedly;
• Not enough inventory to meet demand; and
• Timing cash flow gaps during periods of slowed income.

In these situations, hospitality operators do not have enough time to wait "weeks or months" for traditional lenders to approve a loan application.

What is a Merchant Cash Advance?

A merchant cash advance is NOT a traditional loan; it is, however, a cash advance based on expected credit/debit card sales. The cash advance provides your hospitality business with immediate access to cash in exchange for a percentage of anticipated future sales.

With merchant cash advances, you will receive the full amount of a cash advance that will be deducted from your future credit/debit card sales automatically each day or week. As your sales fluctuate, your future repayment amounts will also increase or decrease based on this fluctuation, allowing for greater flexibility for the hospitality operator.

So, when your sales are high, your repayment amount will go up; however, when your sales are low, your repayment amount will decrease.

How Merchant Cash Advances Help Hospitality Businesses?

Hospitality businesses find that Merchant Cash Advances (MCA) provide the best match for their revenue streams and how they make money. Here's a closer look at why MCAs benefit the hospitality business:

Flexibility in Cash Flow Management

With MCAs, the amount of cash flow each day changes, and MCAs adjust to the sales volume, allowing businesses to manage their expenses without the burden of a fixed monthly payment.

Immediate Access to Funds

Emergencies occur without warning; if an emergency occurs and equipment breaks or urgent repairs are required, or you need to pay suppliers, you can access the funds quickly with an MCA (usually much quicker than with a traditional loan).

No Collateral

MCAs do not require collateral, which means that you do not have to risk any property or assets to receive funding.

Credit Score Incentive

Unlike traditional bank loans, where the decision to approve you is largely based on your credit score, MCAs consider your sales performance when determining if you will be approved. Thus, businesses with less than perfect credit can still benefit from an MCA.

Use Funds as Needed

MCAs do not impose restrictions on how the money you receive can be utilized. Hospitality businesses have the freedom to direct the capital toward buying inventory, paying employees, making renovations, marketing their establishment, or simply obtaining working capital.

Merchant Cash Advances and The Hospitality Sector

Types of Merchant Cash Advances used by The Hospitality Sector

The Merchant Cash Advance is often used by hospitality providers to meet:

• Daily cash flow realities
• Cover payroll during quieter times
• Buy larger quantities of products (eg. food, beverage, etc.)
• Emergency repairs/maintenance
• Renovation and/or remodels
• When preparing to handle a larger volume of guests during peak periods
• To expand locations (new/added) or backup locations.

How to Obtain Merchant Cash Advances

It is straightforward to obtain a Merchant Cash Advance.

You need to:

• Identify reputable Merchant Cash Advance Providers.
• Provide business information and general sales data to the provider.
• Read the offer and repayment terms; evaluate what fits best within your business plan.
• Receive immediate funding.
• Automatically remit payments via future sales, to the lender.

So, the single most important thing you can do to obtain and continue utilizing Merchant Cash Advances is to find a good Merchant Cash Advance Provider. Look for transparency, fair terms and great support.

The Benefits Of Choosing Swish Funding For Your Hospitality Business

Swish Funding understands how different hospitality businesses operate, and what it is that they face as challenges when looking for funds. The cash flow from a hospitality business can be very difficult to predict and therefore can make it very difficult to obtain funding through traditional lending methods. That's why we have created our merchant cash advance program; to provide a different way for you to obtain funds to run your hospitality business without the additional stress of using traditional methods.

With Swish Funding:

• Fast and easy access to your funds.
• Fees are stated up front. There are no hidden costs or surprises.
• Flexible repayment plans based on your sales.
• No collateral or time-consuming application processes required to receive funds from Swish Funding.
• Our funding solutions are designed specifically for the hospitality industry.

We will work with you to keep your business afloat, remain competitive, and continue to grow in these challenging times.

Is A Merchant Cash Advance Right For Your Business?

You operate a hospitality business, and your business:

• Accepts credit and debit cards as a form of payment on a regular basis
• Requires quick/cashingly-related access to working capital
• Experiences an inconsistent cash flow
• Has a desire to repay the merchant cash advance on a flexible schedule (ex: based on your sales).

If you have answered yes to all of the questions above, then you may want to consider a merchant cash advance from Swish Funding as an option.

How To Get Started With Swish Funding For Your Hospitality Business?

You are not alone. You have many funding options available today. With the right funding partner, you can reduce the burden of having to manage your expenses and focus on what you do best: Providing great service to your customers.

👉Apply for a Merchant Cash Advance from Swish Funding today, and provide your hospitality business with the capital it needs to be successful.