When the account runs dry, the financing offers are suddenly everywhere — factoring, revenue advances, short-term credit, each promising cash this week. Some of them are legitimate tools. But every one of them answers only one question — where does this month's cash come from? — and none of them answers the one that decides whether you'll be back in the same place in ninety days: is this a timing problem or a profitability problem? A venue can be full and unprofitable; borrowing against a margin leak doesn't fill the hole, it rents you a bigger one, with interest.
What each option actually is
- Factoring (affacturage) — you sell your unpaid B2B invoices for cash now, minus a commission (commonly 1–3% plus financing costs). The honest catch for a restaurant: most of your revenue is B2C, paid at the till — there's little to factor unless you run catering, events or corporate accounts
- Revenue-based advances — cash now, repaid automatically as a percentage of future card takings. Fast and undemanding, and precisely because of that, the effective annualized cost is usually the highest of the list; compute it before signing, not after
- Short-term bank credit and overdrafts — the cheapest money on the list when you can get it; banks want to see numbers, which is exactly the discipline that helps anyway. In France, a refused credit can go to the médiateur du crédit
- Supplier terms — often the cheapest financing that exists: negotiated payment delays with your suppliers cost a conversation, not a commission
The audit that comes first
Before any application, run the leak audit — because a lender will look at your numbers anyway, and because if the audit finds the money, you don't need the lender. Five places to look, in order of speed: supplier price creep (compare this month's invoice prices to three months ago — silent increases are the most common leak), portions drifting from spec, the sales mix (your best-sellers may be your worst earners), comps and voids nobody logs, and dead opening hours that can't cover their own crew. Each one is found with numbers you already have.
The arithmetic that makes this concrete: on a venue doing 40,000 a month at a 5% net margin, recovering two points of prime cost frees about 800 a month — permanently. A 30,000 advance repaid over a year costs you a comparable monthly amount, and at the end you're back where you started minus the fees. Same cash flow, opposite direction.
When borrowing is the right answer
Sometimes the gap really is timing: a one-off equipment failure, a seasonal trough in a venue that's profitable across the year, an investment with a return you've actually computed. Then short-term financing is a tool like any other — and the leak audit still pays, because walking into the bank with a costed menu, a weekly prime cost and a margin trend is what makes the file credible. If the venue is genuinely at risk beyond a cash gap, the options are different — the full guide on struggling restaurants covers the legal recourse that exists in France and Switzerland, and why talking to your accountant early keeps all of them open.
At Chat Noir, my club in Geneva, the discipline that replaced the overdraft conversations was boring: every recipe costed, every invoice scanned, the margin read weekly. The bank never got more sympathetic — we just stopped needing the meeting.
