Restaurant and food service owners we help
The restaurants we hear from are almost always carrying multiple MCAs by the time they call. The structural reason is consistent: restaurants run on 8-to-12% net margins on a good year — often closer to 3-to-5% — with 60% to 80% of revenue arriving as card payments that settle daily. That makes them perfect MCA targets. The first advance lands at reasonable terms. The second, third, and fourth are where the cash flow trap closes.
What we typically see:
- Four to seven open MCAs with combined daily ACH debits of $1,500 to $4,000.
- The delivery platform tax. Major delivery apps charge up to 30% per order, taking another bite out of already-thin margins before the MCAs even debit.
- Seasonal swings the MCA structure ignores. A slow Tuesday or a quiet January doesn't change the fixed daily withdrawal — but it does change whether you can cover payroll.
- Equipment failures that trigger the next advance. An oven, walk-in, or POS system fails, traditional bank approval takes 4-to-8 weeks, and another MCA fills the gap.
Why restaurant owners work with us
The MCA market is built around restaurants because the daily card-settlement model fits the advance-on-future-receivables structure perfectly. That same fit is what makes it so destructive: funders debit the same revenue stream that pays your rent, your line cooks, and your purveyors.
We are not selling you another advance. We're not a debt-resolution firm paid on contingency, which means we have no incentive to push you toward settlement or away from it. We are paid a flat consulting fee by you, to help you understand exactly where you stand — what each contract requires, what reconciliation rights you may have, what restructuring or refinancing paths are realistic, and whether the operating business can actually be saved at the cost of fixing the debt.
Sometimes the honest answer is that the restaurant is fundamentally sound and just needs the debt restructured. Sometimes it's not — and a clear-eyed walk-through tells you which one you're looking at.
How a restaurant consultation works
Step 1 — Position review. We map every open MCA, your card processor arrangement, delivery platform fees, lease and rent structure, payroll cadence, and seasonal pattern. We need to see the real numbers — not just the debt, but the operating margin underneath it.
Step 2 — Options modeling. We model the realistic paths — restructuring with current funders, refinancing into bank or SBA terms if eligible, settlement on specific positions, or in some cases bankruptcy reorganization if the math truly doesn't support the existing structure. Each path includes cost, timeline, and risk.
Step 3 — Written decision framework. You leave with a written plan keyed to your priorities — keeping the doors open, protecting personal credit, minimizing tax exposure on forgiven debt, or making the call to close cleanly. You can execute it with us, with your attorney, or on your own.
What restaurant owners should know about MCA debt
A few specifics that matter for food service operators evaluating their options.
Factor rates vs. interest rates. MCAs price using a factor rate, not an APR. A $50,000 advance with a factor rate of 1.4 means you owe $70,000 regardless of how quickly you repay. On annualized terms, the effective cost commonly runs 50%-to-150% APR — and sometimes higher when the advance is repaid quickly. The Federal Trade Commission and several state regulators have pushed for clearer commercial financing disclosures because of exactly this opacity.
Reconciliation clauses are often overlooked. Many MCA contracts include reconciliation provisions that allow the daily debit to be adjusted if revenue drops. They are rarely volunteered. If yours contains one, it can be a powerful tool — but it has to be invoked correctly and on a documented record. Our guide to evaluating an MCA stack walks through what to look for.
Restaurants in stacked-MCA situations have specific bankruptcy options. Subchapter V (a streamlined small-business Chapter 11) has worked well for restaurants in some cases because the going-concern value of an operating restaurant — lease, equipment, brand, staff — is often higher to creditors than a liquidation. This is not a recommendation, just context. For neutral baseline information on small business financing and resources, the U.S. Small Business Administration is a useful starting point. None of this is legal or tax advice.