If there is one industry that is sure to never go out of style, it is the food business. How often does the average person get hungry? Three, four times a day? The point is that as long as there are people, there will be the need for food.
So with this obvious point being made, it may be fair for one to assume that opening and running a restaurant is a surefire way to turn a profit. One may also assume that a restaurant's assured success must mean it is an easy task to obtain a bank loan to help fund the necessities of running the business.
Well, of course, neither is true.
There is a lot of competition in the food industry, and as Tim Berry states in an August 2006 article on Entrepreneur.com, “more people seek advice on launching a restaurant business than any other type of business.”
While Berry's article focuses on advice for entrepreneurs who are looking to open a restaurant, a lot of his tips may come in handy for current restaurant owners all throughout Canada. Not surprisingly, Berry mentions the liklihood of business owners seeking extra capital from a traditional financial institution and is keen on highlighting the pitfalls of doing so.
He writes: “Your borrowing options include commercial bank loans, which require assets you can stake as collateral, and SBA loans, which require less collateral than bank loans but still require you to put up 30 percent of the starting costs to qualify for the guaranteed loan.”
In this short paragraph, Berry unknowingly comments upon the stark contrasts between loans and merchant cash advances. Restaurant owners, who also happen to be clients of Synergy Merchant Services, revel in the fact that no collateral was necessary at all in order to attain the extra capital needed to develop their business. In addition, nothing was required to be “put up” in order to obtain approval for the merchant cash advance.
With it being so difficult to work with banks, especially during today's financial climate, many restaurant owners are finding the merchant cash advance a much more viable option.
Unlike the earlier-made assumptions about the automatic success of restaurants, Berry actually points out the riskiness of the food service industry. An investor, while always a great option if one is able to be secured, is rare in this type of business.
As Berry writes, “In general, restaurants aren't targets for professional investors because they're so risky. The few exceptions include celebrities who back restaurants that capitalize on their names, and well-known chefs and successful restaurant owners opening new venues.”
Are you hungry for that much-needed extra capital to secure the future success of your restaurant? If so, it's time you gave Synergy Merchant Services a call.