A leading finance provider is offering pubs and restaurants access to additional funding and says the rate at which they pay it back is linked to how much business they do.
365 Business Finance said its merchant cash advance was already being utilised by small to medium-sized companies within the hospitality sector seeking to adapt to new customer requirements post-Covid.
A merchant cash advance is designed as a quick way for any business that accepts credit or debit cards to raise capital. It is billed as a fast and flexible alternative to a bank loan or overdraft.
Managing director, Andrew Raphaely, said: “Although government loan schemes have been used by businesses to keep their heads above water during lockdown, further finance is needed in many instances to invest in adapting as coronavirus changes the way restaurants and pubs, in particular, meet the needs of customers long-term.
“Our merchant cash advance offers the flexibility and peace of mind that operators in the food and drink industry need right now.
“Repayments are taken as a small percentage of future card sales, meaning the restaurant or pub only repays the cash advance when it receives card payments from customers – so during much slower months due to Covid-19 restrictions, less is repaid and cash flow for the business is not adversely hit.”
The financing can be used to help businesses fund the extra time and resource needed to adapt the services they offer, and to promote their revised offerings to customers in order to survive changes to market conditions.
The merchant cash advance product is aimed at SMEs looking for unsecured business funding from £5,000 to £200,000. There are no fixed terms, no hidden fees or APR, 365 Business Finance said.