Factors rely on the creditworthiness of the clients of a Franchise and the current invoices of a Franchise rather than extensive credit checks, FICO Scores or Tax Records.
The Franchise owner sells their invoices, or receivables, to a Factor, who then collects the funds when due and then takes out a Factoring Fee and remits the remaining funds to the Franchise Owner.
There can be many challenges in the Restaurant and Hospitality Industry
A Franchise Factor is familiar with the unique issues facing businesses operating within the Restaurant and Hospitality Industry, such as:
- Seasonal declines in sales
- Owners with past credit problems
- New businesses with no credit history
- Rapidly growing businesses with fluctuating sales and earnings histories
- Unique expansion opportunities that are lost because of financial capital shortages
- Insufficient cash to meet payroll and other operating expenses
- Inventory and supply needs that go unmet
How Can Franchise Factoring Services Benefit A Franchise Business
By offering the Restaurant and Hospitality Industry Businesses Franchise Factoring solutions to solve their cash flow problems, turning their credit card receipts into the immediate cash flow which a Restaurant, Hotel, Spa or Resort needs to:
- Meet payroll expenses and operating expenses
- Purchase inventory and supplies
- Expand to more additional locations
- Take advantage of unique and time-sensitive business growth opportunities
Businesses in the Restaurant and Hospitality Industry face various cash flow challenges at one time or another.
When Cash flow becomes a bigger issue during periods of business growth, always having immediate access to cash when its needed can mean the difference between financial growth and a missed financial opportunity.
Through Franchise Factoring businesses in the Restaurant and Hospitality Industry can maintain their needed level of cash flow for the foreseeable future.
Having slow payments on invoices can in particular affect and slow down cash flow and have a negative effect on a business.
The Factor provides an advance of funds to resolve the cash flow issues of the Franchise Business.
A Factor purchases the invoices of a Franchise and collects them on behalf of the Franchise.
Once the Factor has done this they pay the Franchise in two installments.
First paying the Franchise 80% of the value of the invoices and then 20% after their customers/clients have paid the invoices in full.
Also Take Into Consideration: When planning to apply for an SBA loan for Franchise Financing, One needs to have a minimum FICO Credit Score of between 640 to 675.
For More Detailed Information Call Now! (800) 413-5167 Extension 9
SECA Funding Company