The restaurant business is both at once, an exciting and nerve-wracking experience. The first thing you think about is the restaurants’ finances and how to cover all of the daily businesses expenses. Stocking supplies regularly, employee salaries and emergency expenses are something one must always be prepared for but it is inevitable for some of these to be encountered at an unfortunate time in the restaurant’s lifespan and will require immediate action. These things can be pretty overwhelming which is why we’ll tell you about MCA and how it is a great option for your business as opposed to a traditional bank loan.

Funding for restaurants: Bank Loan, or MCA?

The first step in getting a loan like this is to be crystal clear on what the choices made available are. One may request either a bank loan or what’s called a MCA or Merchant Cash Advance. Let’s go through both briefly.

  •    Bank Loan: A typical business owner acquiring a loan from a regular banking institution. It’s typically one that they have their business account with. The bank will ask them to produce some stringent proof on what kind of financial backing they already have. This tells you that banks are interested in customers with a lot of back-ups. Most times, if you want a business loan for a startup restaurant, you’ll have to produce some kind of concrete and verifiable way to pay it back. New businesses must have a 1-2 year profit and loss report and it must be strong.
  •    MCA / Merchant Cash Advance: This is the most friendly and flexible choice around today. Don’t get it mixed up with a payday loan, this is something for the general public and has nothing to do with small business. A MCA means that you can do things several flexible ways according to your unique situation. For example, if you need a funding for restaurants loan the lender will determine how much the loan will be based on your unique business dynamic and the factors within. Then, you would most likely offer up an agreed upon percentage of your future profits in order to repay the loan. This is a great deal because it’s more like a revolving line of credit like a credit card. This means you get to work in your business and pay off the loan daily instead of waiting for a date to pay a large amount.

There are other loan options but run along the lines of grants. These could help out the process but be aware that there are a lot of people competing for the same grant and writing for one takes a lot of time, experience, and money. The whole point of the MCA loan is the freedom it provides you to grow your business without having to dip into reserves to pay off daily business expenditure, making MCA a very attractive opportunity for many seeking funding for restaurants.