Lavu, a major global restaurant software and payments solution provider built by restaurant people, announced Lavu Capital, offering restaurant merchants cash advances to provide funding that can be used to help run and grow their businesses. Powered by Parafin, a full-stack, embedded fintech company, Lavu Capital gives restaurants, primarily small businesses, easy access to fast capital that typically is not available through traditional bank financing.
Unlike a loan that charges interest, merchants agree to pay a portion of future sales in exchange for receiving fast and efficient funding, all for one low, flat capital fee based on the cash advance amount. With Lavu Capital, pre-approved merchants that demonstrate consistent or increasing sales get access to a cash advance that can be used for any business expense such as equipment, staff, marketing and rent costs. This eliminates the application and credit check requirements that often preclude small businesses from receiving bank funding.
Here’s how it works:
Eligible merchants view their pre-approved advance offers in their Lavu Dashboard, toggle the slider to select the capital amount that best fits their business and verify bank account details in order to accept the cash advance.
After accepting, the merchant receives the funds directly to their bank account in 1-2 business days. This requires no additional paperwork and has no impact on credit score.
The merchant will pay a one-time, flat capital fee, that depends on the amount of accepted capital.
Payment is automated on a set pay schedule and is based on a percentage of sales through Lavu determined prior to accepting the capital. There is no interest, no minimum payment, and there are no late fees.
“It’s frustrating to see how many restaurant owners don’t qualify for traditional loans despite their strong track records,” says Saleem Khatri, CEO of Lavu. “In the same way we helped thousands of restaurants quickly transition to online ordering to survive the pandemic, we are launching Lavu Capital to help more restaurants keep their doors open during challenging times.”
“Our mission at Parafin is to grow small businesses by making it easier and faster to access financial services, starting with capital,” adds Sahill Poddar, CEO, Parafin. “We’re honored to work with platforms like Lavu that are heavily invested in the growth of the thousands of restaurants they work with, in order to deliver on this mission.”