Traditional borrowing in the hotel industry often comes with a number of hurdles including lengthy applications, complicated paperwork, credit checks, personal guarantees and more.
One funding method that is popular with businesses that accept card payments are merchant cash advances. They require only minimal paperwork & a decision can be made swiftly, with funds being received in as little as 24 hours from application.
This form of funding is great for seasonal businesses such as hotels because repayments are based on a percentage of your daily card sales, typically between 10% and 15%. This means that repayments remain affordable during quieter trading times. During busier times higher card sales reduce the repayment amount quicker. Equally if you take payment in cash also, this is not used to repay your borrowing.
Merchant cash advances also do not charge interest and there is no set repayment period. As opposed to interest, there is one set fee which is calculated at the beginning and figures remains as the total repayment figure regardless of how long it takes to pay back the borrowing. Repayment is typically over 6 – 12 months.