By Anthony Collin, CEO, Smart Business Funding. Published November 5, 2026.
A regional restaurant supplier gets a call on a Monday morning: a hotel group wants to move its whole weekly order to her. It is the biggest account she has been offered. It is also an account she cannot serve with her current truck, her current cold storage or her current staff. The hotel group wants an answer by Friday.
This is a composite scenario, but the pattern is familiar. Growth usually asks for cash before it pays any back. The useful question is not “can I get funding?” but “will this particular opportunity produce more profit than the funding costs, and can I carry the payment while I wait?”
The scenario: one big account, three upfront costs
She estimates she needs about $60,000: a used refrigerated van, extra cold storage and two part-time drivers for the first quarter. Here is how she lays it out. All figures are assumptions for illustration.
| Planning line | Illustrative figure |
|---|---|
| Funding received (assumed) | $60,000 |
| Total repayment (assumed) | $76,800 |
| Cost of the funding | $16,800 |
| Repayment over about 6 months | about $610 per business day, paid daily |
| Added monthly sales from the new account | $40,000 |
| Gross margin on those sales | 25% |
| Added gross profit per month | $10,000 |
| Added gross profit over 6 months | $60,000 |
| Profit after the $16,800 cost, over 6 months | $43,200 |
On paper the account clears the cost of funding comfortably. But she does not stop there, because cash flow and profit are different questions.
Check the payment, not only the profit
A fixed daily or weekly payment starts right away, and the hotel group may pay on net 30 terms. In the first month she pays out about $13,000 in funding payments before the first invoice is collected. She should confirm she can cover that gap from cash on hand, and she should test a slow month: if the account delivered half of what she expects, would the payment still fit?
| Case | Result per month | What it means |
|---|---|---|
| Account delivers 100% of plan | $10,000 added gross profit | Payment is covered, profit remains |
| Account delivers 50% of plan | $5,000 added gross profit | Monthly payment of about $12,800 exceeds the added profit; she must cover the gap from other income |
That second row is the honest risk. It does not mean she should not proceed. It means she should size the amount, term and payment to the weaker case, not the best one.
Compare the options
- A business line of credit, offered through partners where approved, may suit ongoing needs.
- Equipment purchases may fit equipment financing through partners where approved.
- Short-term working capital financing or a merchant cash advance uses fixed daily or weekly payments over a shorter period, with the cost shown in dollars in the written agreement.
A decision checklist before you sign
- What is the total amount I will repay, and what is the cost in dollars?
- Is the payment fixed, and is it daily or weekly?
- What happens to my cash if the new revenue arrives a month late?
- Does the opportunity still pay off if it delivers half of what I expect?
- Have I compared at least one other option?
Smart Business Funding works with owners across many industries. See our industries we serve or read our overview of business funding from $10K to $5M.
Ready to talk through your numbers?
Smart Business Funding offers business funding up to $5M, subject to underwriting and a complete application. Direct program applications start with a soft credit pull. You can apply online or call 1-866-737-6278 (866-RE-SMART). Brokers and referral partners can learn about our partner program.
Illustrative Composite Scenario, not a real customer. All dollar figures in the scenario are assumptions for illustration, not offers, quotes or predictions of results. Actual amounts, terms, payment schedules and total repayment depend on underwriting, the program and the written funding agreement. Smart Business Funding does not offer loans; a merchant cash advance is a purchase of future receivables. Not every business qualifies for every program. Partner products are offered through partners where approved.
Your next step
See how working capital covers payroll, inventory and bills while you wait on customers.
Apply nowWorking capital financingCompare all optionsOur initial Direct Fund Program credit review uses a soft inquiry. Credit inquiry requirements for other financing programs may vary and will be disclosed where applicable. Some complete applications may receive offers within hours, but timing varies and is not guaranteed. All funding is subject to underwriting and approval. Call 1-866-737-6278 (866-Re-Smart).
