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Faced with tough economic challenges and less-than-favourable debt terms, the owner of a family-run pub sought the help of Millbrook Business Finance to turn his situation around using Merchant Cash Advance for the hospitality sector.
Client background: A much loved family-run pub
Jonathan, a seasoned professional in the hospitality industry, manages a family-run gastro-pub in Warwickshire. With several years of experience, he climbed the ranks to management and eventually took the helm of his own pubs. Established in 2019, the family business faced the brunt of the Covid impact but is resiliently bouncing back, poised for a prosperous future.
The challenge: Smoothing cash flow and debt consolidation
Jonathan encountered cash flow challenges, due to seasonal fluctuations, compounded by the increased prices of stock due to UK alcohol duty changes on wine and spirits. While a debt consolidation loan initially helped cover short-term debts, the fixed monthly payments became a headache during less bustling trading periods.
The solution: Merchant Cash Advance for the hospitality sector to make debt manageable
To address the cash flow fluctuations, Philip Booth, a business finance specialist at Millbrook Business Finance, proposed a Merchant Cash Advance tailored to the pub's daily takings. Unlike fixed monthly payments, this approach offered flexibility, aligning repayments with the business's ebb and flow. Jonathan secured a £100k Merchant Cash Advance with a straightforward application process, no fixed term, and payments agreed as a percentage of card terminal transactions.
Benefits of Merchant Cash Advance for cash flow
Here are the benefits business owners like Jonathan experience with a Merchant Cash Advance:- Flexibility in repayments: Repayments based on daily card terminal takings and adaptable to business performance.
- Lower barrier to approval: The application process is simplified with easier criteria to meet.
- Speedy approval: With a lower barrier to approval and a straightforward application process, businesses can access funds swiftly when needed.
- Credit score improvement: Responsibly managing a Merchant Cash Advance can positively impact your hospitality business credit score, establishing a stronger financial foundation for future financing needs.
The results: Payments adaptable to business performance
The £100k Merchant Cash Advance was fully approved, empowering Jonathan to consolidate his business debts into manageable repayments and smooth out cash flow uncertainties, freeing him up to focus on growth opportunities for the future.
The impact: Reduced monthly outgoings and a credit score boost
Jonathan's family-run gastro-pub not only weathered the financial storms but emerged with a robust financial strategy, setting the stage for continued success in the ever-evolving hospitality landscape.
- Monthly outgoings were reduced, saving Jonathan money for reinvestment in the business and working capital.
- The Merchant Cash Advance made a positive impact on the business’s credit score, helping Jonathan establish a stronger financial foundation for the future.
Summary
In facing the challenges of cash flow fluctuations and increased costs due to the cost-of-living crisis, Jonathan sought the expertise of Millbrook Business Finance. Facing the strain of fixed monthly payments on a debt consolidation loan during quieter trading periods, Jonathan opted for a Merchant Cash Advance specifically for the hospitality sector.
This tailored merchant loan not only secured £100k in funds but also provided the flexibility needed for repayments linked to daily card terminal takings. The impact was significant, reducing monthly outgoings, saving money, and positively influencing Jonathan’s credit score. This strategic financial move empowered the family-run gastro-pub to overcome financial uncertainties, reinvest in the business, and set a solid foundation for future success.
Get in touch to discuss your business financing needs with one of our experts. Alternatively, apply for business finance with Millbrook now for a tailored financing solution that can help you keep your cash flow healthy and navigate times of uncertainty.
