Do I need to switch card processors to get an advance?

Usually not. Repayment is normally taken as a fixed daily or weekly ACH debit from your business account rather than a split at the processor, so you keep your existing setup.

Can a restaurant open less than a year get funded?

Often yes, from about six months of trading. Under six months the options narrow sharply, and the amounts are smaller.

Will a second location count as one business or two?

It depends on how the deposits flow. If both locations settle into one account, underwriting reads them together, which usually helps the amount you qualify for.

Guide

Why do banks turn down restaurants for loans?

Mostly on the category rather than the business. Banks price thin margins and high restaurant failure rates into their model and decline before they read your numbers. Daily card settlement — the thing that makes a restaurant look risky to a bank — is exactly what a revenue-based funder underwrites, because it is predictable and verifiable.

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Why the bank says no

Restaurant lending is a category decision at most banks before it is ever a business decision. Margins are thin, the failure rate is genuinely high, and an underwriter with a portfolio to protect declines on the sector.

The balance sheet does not help. Almost everything you have is leasehold improvement and equipment that is worth a fraction of its cost the moment it is installed, so there is little a bank can secure against.

And most restaurants lease. No property means no collateral in the form a bank's model is built to recognise.

What each underwriter weighs

The same business, read two different ways. A bank decision is built on credit, collateral and filed accounts; a revenue-based funder builds it on the money moving through your account. That is the whole reason a bank decline says very little about whether you can be funded.

What a revenue-based funder reads instead

Card settlement arrives daily and is verifiable to the dollar. From an underwriting point of view that is unusually good information — better than the quarterly management accounts a bank would ask a larger business for.

Because repayment is taken as a share of card revenue, it flexes with trade. A slow February costs a smaller payment rather than a default, which is the whole reason the product exists for seasonal businesses.

Seasonality that reads as risk to a bank reads as a pattern to a funder looking at twelve months. A predictable summer peak is not instability.

What to have ready before you apply

Six months of business bank statements, plus your card processing statements if you have them — processing data usually improves the offer.

Average monthly deposits as a real number, not an estimate.

What the money is for. Equipment, a build-out and covering a slow quarter are different risks and get different pricing.

Sources

Consumer Financial Protection BureauFederal consumer-finance regulator. Publishes guidance on credit terms and disclosure.
U.S. Small Business Administration — LoansFederal loan programmes, eligibility and what the SBA does and does not guarantee.

Why do banks turn down restaurants for loans?

Why the bank says no

What a revenue-based funder reads instead

What to have ready before you apply

Related questions.

Find out what you qualify for before you need it.