Merchant cash advance for restaurants
A restaurant looks good on paper to a funder: steady daily deposits. The same daily rhythm is what makes a fixed payment risky. These are general considerations, not claims about any one funder.
Card-heavy revenue helps the review
Most restaurant sales run through a card processor and land in the bank every day or two. That produces the clean, frequent deposits that funders look for on a bank statement. Cash sales that never reach the bank do not count, so a restaurant that leans on cash may look smaller on paper than it really is.
Deposits are not your cash
A day's deposit includes money that is already spoken for: sales tax, tips owed to staff, processor fees and the supplier invoice due Thursday. Judge a payment against what is left after those, not against the deposit total. If tips are paid out in cash from the drawer, your deposits may look different from your sales, so know your own numbers.
Delivery apps and settlement timing
Orders through delivery platforms typically settle on the platform's schedule, minus its commission. Deposits can arrive in lumps or weekly. A funder reading your statement sees the net, and a daily payment is taken whether or not the lump has arrived yet.
Seasonality
Patio season, holidays, tourist months and school calendars all move restaurant sales. An advance taken in a strong month is paid mostly during the months that follow. If those months are slow, the payment is the same size against smaller deposits. Count the number of business days the advance will take, and look at what your sales did in that window last year.
Food cost and labor swings
When ingredient prices or wages jump, margin shrinks while the payment stays put. A restaurant running on thin margins has less room for a fixed daily draw. Build the worst month of the past year into your math.
What funders tend to review
- Several months of bank statements, usually showing deposit totals and counts.
- Negative balance days and returned items.
- Existing advances and their payments.
- How long the business has operated.
Requirements differ between funders, so a no from one does not mean a no from all. The form on our home page checks your answers against the minimums we screen for before it asks for a phone number.
Plan for the payment, not the pitch
Before you talk to anyone, write down three numbers: your average daily deposit over the last three months, your lowest week of the last year, and what leaves your account for fixed costs each week. If the payment you are quoted fits inside the lowest week with room to spare, an advance is at least workable. If it only fits in an average week, it is a bet on every week being average.
When to hold off
- Your restaurant loses money in a normal month and the money would cover that.
- You are about to enter your slow season.
- You can wait for a bank product that costs less.
- You already carry an advance and would stack another payment on top.
- A one-time repair or renovation could be paid more cheaply another way, for example through equipment financing from the vendor.
Whatever you decide, compare the total paid to the funder with what you receive. The cost guide and calculator show how.