2014 has started off strongly for the hospitality sector. Compared to January of 2013, sales are up by an impressive and significant 7.2%. Although this increase could be attributed to the appalling weather conditions experienced in January 2013, with heavy snow affecting many parts of the country, the reaction to these figures has been positive. Having been through a tough recession in which the closure of pubs throughout the UK has been in the media spotlight, there is a growing optimism within the industry that things could be picking up. Almost surprisingly, the biggest growth areas are outside of London. This is doubly surprising when you consider that London is the key economic driver and responsible for the country emerging from the recession as a growing economy once again. One of the rising trends is pubs which sell food. This type of establishment appears to be growing faster than more traditional food outlets. This demonstrates that one of the keys for survival is for establishments to diversify and expand into new markets.
If you run a pub or a restaurant, now could be a great time to invest in your business. Maybe renovation or redecorating is needed, or maybe you want to add that kitchen so that you can start offering food. However, the thought of trying to secure finance in a just recovering economy might put you off the idea. Bank loans are notoriously difficult to obtain for businesses in the hospitality sector, particularly establishments which sell food and drink but that needn’t be the end of your expansion dreams. Using an alternative lending method to secure necessary funds could be the answer. A lending solution such as a merchant cash advance could be the most sensible way to both expand your business. A merchant cash advance is an advance of a sum of money which is based on monthly credit and debit card sales. This money is made available to spend on upgrading the business or whatever reason it was obtained. From that point, an agreed percentage of card sales will be allocated to pay back the cash advance.
One of the main advantages of this type of borrowing is the simplicity of the system. Basing the amount lent on card sales which are easily provable means that there is no need for complicated business plans to prove how repayments will be made. As the money is an advance and not a loan, it is not subject to the strict lending rules that have prevented banks from approving loan applications from small and medium businesses and because the repayments are based on card sales, the amount will go up or down in line with how the business is performing, hence ensuring that repayments will not become a burden. Applications are quick and easy and typically take 7 to 10 days to process.
When put that way, it’s probably no surprise that there has been an increase in the number of businesses seeking alternative lending solutions such as the merchant cash advance. If you work in the hospitality sector and want to see your business grow in 2014 then it is certainly something worth investigating further.