The alternative financing sector is uniquely designed to serve the needs of the small business community. One can easily chalk up the rise of the whole alt-fin industry to the fact that it caters specifically to the under-financed SMEs of America.
The reason for the mutually beneficial partnership between alternative lenders and SMEs is not hard to fathom. Even though small businesses form over 99% of the American economy, they have been literally frozen out of the credit sector due to stringent guidelines and unhelpful business models of the traditional financial sector. In this barren economic landscape, alternative lenders have become founts of easy liquidity – helping many small businesses operate smoothly and expand effortlessly.
Restaurant and café owners find stable funding partners in the alternative financing sector
One of the industries that have really leveraged the various advantages of alt-finance is food and catering. According to the New York based financing company, Mantis Funding, Restaurant and café owners form the biggest group of clients approaching alt-lenders every year. Let’s understand why –
Most businesses have well defined times of high demand, followed by troughs of lean times. Restaurants and cafes are no different. Along with seasonal demand, their revenues are also heavily dependent on location, time of the day or week, and new competitors popping up in the neighborhood.
For small business owners, an extended period of low demand can become difficult to manage – alternative lenders can be extremely helpful in these scenarios. Lenders such as Mantis Funding offer easy and quick funding deals such as merchant cash advances (MCAs) that can help restaurant and café owners to keep up with required payments while waiting for the business to pick up. They usually use MCAs for expenses such as paying salaries, utility bills, rent, insurance premiums, etc.
If a café or a restaurant is successful, then most owners think of expansion. This could be adding more space to the existing place or moving to a new location or opening a second restaurant altogether.
Of course, any type of expansion plan must be backed by substantial investment, and as getting funding approval from banks is well neigh impossible, most restaurateurs and café owners turn to alternative lenders. Unlike the traditional banking sector, alt-lenders like Mantis Funding reviews applications based on the strength of the revenues brought in by the business.
They don’t base their entire approval process just on FICO scores; instead, they have a more robust system that uses a variety of data touchpoints (such as social media, revenue flow for the last year or quarter, pending invoices or expense tracking) for determining the creditworthiness of their clients.
Advertising And Marketing Expenses
Restaurants and cafés are heavily dependant on online reviews; almost everyone checks guest reviews and ratings before they pick a place to eat. This dominance of online reputation demands that business owners take a more proactive role in improving their position online. A sophisticated digital marketing effort costs money to set up and run, and using MCAs from alt-lenders is an excellent way to project the right online image.
The Bottom Line
Most small businesses don’t have significant liquidity needs, but they do need a leg up from time-to-time. With their easy and fast funding processes, alternative lenders are perfect credit partners for Restaurant and café owners. Whether you need a quick $2000 to pay utilities or a $200,000 to open a new restaurant – alt-lenders like Mantis Funding review applications quickly and wire money even faster.
Do get in touch with a trusted online alternative funding company to understand all your options.