Thriving Not Surviving During the Holiday Season
It may still be 80 degrees outside but the holidays are coming to Miami. With the season rapidly approaching, many small businesses find the need for extra funding, particularly restaurants and bars. Not only do locals go out more during this time, but tourist season kicks-off as snowbirds start to shuffle south for warmer weather or prime events like Art Basel. That means more cafecitos, avocado toast, and rosé all around.
This is great for large and small businesses alike but can be an overwhelming time for small businesses if they aren’t properly prepared. There comes a time when the extra funding for small businesses is a must in order to capitalize on the busiest time of the year. There can be a lot of reasons restaurants and bars need loans during the holidays:
Purchasing inventory: Businesses may find that it’s time to buy extra products in preparation for the busy season. Establishments that don’t plan for this influx of customers may find themselves overwhelmed and ill-prepared which can cause them to possibly lose money or need to turn away customers. Financing can help bridge the gap and help businesses take advantage of the increase in traffic during this time.
Marketing and advertising: The holiday season is the perfect time to really amp up those marketing endeavors and finish out the Q4 strong. Marketing and advertising can help sky rocket business by getting their name and products in front of more consumers, but it does take some financial backing to do so. That’s where loans come in.
Refinancing debt: Dealing with debt during the holidays can be a major burden on small businesses. Getting funding so that the business can refinance in order to pay off their debts over a longer time period or at a lower rate can make a big difference for struggling establishments.
Seasonal help: The busy season is also a time when businesses must bring on more helping hands to keep things moving. When this happens, businesses need to invest in training for their seasonal employees, cover the cost of background checks and other pre-employment costs, and some may even need help with payroll.
Business expansion: This time of year may also be a good time to invest in an expansion so that the next year can really start off with a bang. It’s no secret that expansion can help small businesses become more profitable but without funding for that expansion, some are unable to keep up. Expanding takes a lot of investment but the ROI can be massive if done correctly. Funding from small business loans can make this dream a reality.
Whatever the case may be, there are lots of options out there for small business loans in the Miami area. We suggest using your local funding platform service, Financial Capital Financing. We’re located right in Downtown Miami in the WeWork building and specialize in helping the community of small business owners achieve all of their growth goals. More on us later, but first let’s talk about what your options are for small business funding.
Typical Funding Solutions for Restaurants and Bars
Merchant Capital Advance
You may have heard of the term merchant capital advance before. This type of financing can also be known as merchant capital, a merchant cash advance, merchant financing, simply a cash advance, or even an MCA for short.
Regardless of what you call it, a merchant capital advance is essentially an advancement of capital (hence the name) that businesses can get in order to make use of that funding a little sooner. This can be a great option for small businesses during the holidays before they see a spike in sales but need the money sooner so that one may prepare and capitalize on the busy season.
A merchant capital advance can sound a lot like a traditional loan but they’re a little different. The borrower will still receive a lump sum of money and need to pay it back plus an added fee just like a loan. They will also still have a predetermined percentage that you’ll need to pay back at a time but unlike a loan, you will allow your lender to automatically deduct that percentage out of your future credit and debit sales. So, rather than paying a monthly payment to your provider you will make a percentage less on each sale up until the time your MCA is fully paid off.
Since you’ll be paying a daily fixed percentage, that means when you have an increase in sales, you’ll be paying off more of your loan and when business is slower you will pay less with no penalty–making this option completely cash flow friendly. This can be a really great option for restaurants and bars since business can sometimes be unpredictable, so their payments can reflect that activity. Borrowers also have the option of accepting a higher percentage rate so that they can pay back their financing quicker.
How does it work?
MCAs can vary from around $5,000 up to $1,000,000 and are easy to qualify for. They also are typically processed quite quickly. In fact, Fast Capital Financing can even provide companies with next day funding and since payments can be made from credit/debit sales or ACH, businesses will find that an MCA can be extremely convenient.
The most common uses for this type of funding is purchasing inventory, filling sales orders, and marketing and advertising.
Short-term loans are loans that are paid off within a few weeks or up to three months. Much like the name suggests, short-term loans are expected to be paid back in a condensed amount of time. That way, small business owners can focus on running their business and meeting their goals rather than managing an overwhelming amount of debt. You might be wondering if you should or shouldn’t apply for a short-term loan.
This type of financing is typically used as a way to bridge the gap between inconsistent times of the year in which profit is low until regular cash-flow returns. This is going to be a better option for bars or restaurants with a longer income history that can vouch for what is to come and are able to reasonably predict the amount of cash-flow they can expect during that season.
How does it work?
A short-term business loan is just what you would think it is; a predetermined amount of money loaned to the borrower to be paid back over time plus interest. The approval process for this loan is easy as well.
Most common uses for this type of funding includes projects that will have an immediate ROI, refinancing debt, seasonal hiring, purchasing inventory, or marketing and advertising. Funds for this type of loan vary from $10,000 to $500,000.
Which solution is best for my small business?
The decision between a small business loan or a merchant capital advance depends on the predictability of your business’s revenue and what you plan to use your financing on. While the two options are very similar, each are better suited for certain circumstances.
Short term loans: Best for businesses with a predictable income and strong history of credit card financing. These loans are for businesses that have been established for a reasonable amount of time, know a range of income they can expect, and have very specific plans for their funding. Short term business loans are suitable for those planning on making bigger business moves such as investing in a large project that will show quick turnaround in ROI, refinancing previous debt, or hiring on seasonal help.
Merchant capital advance: An MCA is going to be the best fit for businesses who are less established but show a strong credit acceptance history. The amount approved for an MCA depends mostly on the history of credit card volume and needs very little history of operation (new-business friendly!).
About Fast Capital Financing
Our Fast Capital Financing instant decision offers options up to $1,000,000 to approved businesses with just one application. Rather than making you jump through hoops and pay outrageous fees, we make it easy by using just one application across 100+ lenders with no application or broker frees and no impact on your credit. That way, you can get your money, invest in your business, and meet your goals as quickly as possible.
How we can help
Fast Capital Financing can get funding to businesses as easy as 1, 2, 3.
No really—we strive to make financing for small businesses as simple as possible, so we are able to approve businesses for funding in three easy steps: You apply online, we get to work behind the scenes, and you get approved and receive instant business loans.
- Apply online – Fill out a short application online with the basics of your business and your financial situation.
- We do the work for you – You kick your feet up and we get to work. We’ll find the right funding for your business between more than one hundred lending partners and eight loan types. (Did we mention we have a bad credit startup business loan guaranteed approval?)
- Get approved and funded fast — Last but certainly not least, you’ll receive our decision within 24 business and if approved the funding will be in your account by the next business day.
Ready to take the first step? Apply now.
Happy Holidays, Miami!