It has been revealed that hotels are among the top ten business categories applying for merchant cash advances in preparation for the festive season ahead.
According to 365 Business Finance, hoteliers feature fifth in the list of most frequent clients for this type of fast and flexible funding – and there has been a 36% year-on-year increase in hotelier customers in the last 12 months.
When it comes to getting the finance to grow their businesses, many independent hotels are turned down by high street banks or are required to secure loans against their business or property, supply business plans and commit to lengthy terms. However, a merchant cash advance is designed to match businesses’ cash flows, with repayments taken as a small percentage of debit and credit card sales, so the funding is only paid back when customers pay them. The cost is fixed up-front regardless of how long it takes to pay, with no late fees or hidden costs.
365 Business Finance Managing Director, Andrew Raphaely, said,
“Hotels require funds to prepare for the Christmas bookings boost, and the flexible approach with a cash advance alleviates the impact of a decline in bookings in January.
“November is a particularly busy month for us and we’ve seen a significant increase in funding enquiries, as hotels prepare for the increased costs associated with Christmas, from buying in extra stock, hiring seasonal staff, completing refurbishments and keeping on top of cash flow. It’s also a key time for these businesses to prepare for a dip in reservations during the first month of the new year, which is why our funding has proven so popular.
“The repayments are made as a percentage of card sales, so in slower months the repayments are lower, meaning cash flow is not impacted as it would be with a traditional bank loan.”