Cash Costs More

Many point-of-sale companies now offer cash from the dashboard. Funding can land within hours, often with no personal credit check. On October 14, Nation's Restaurant News ran a warning: most of these offers are merchant cash advances, not loans.

An advance has a factor rate, typically 1.15 to 1.50, instead of an interest rate. Borrow $50,000 at 1.3 and you repay $65,000. Paying early earns no discount. A 15% holdback takes $150 from a $1,000 slow day, and restaurant margins run 5% to 10%. Repaid over six months, that $15,000 fee works out to close to 100% a year by my math. The author works at a debt settlement firm, so weigh the slant.

On October 9, Carrier, Daikin, Rheem, Lennox, Bosch, AAON and Trane Technologies asked a court to dismiss class-action suits. Plaintiffs say the makers coordinated price hikes starting in January 2020 and hold over 90% of the U.S. market. The makers say supply chains, refrigerant rules and metal tariffs drove prices.

Lennox announced 10 increases totaling 87%. Bosch announced six totaling 39%. Those are announced figures, not verified prices paid. No judge has ruled.

Wages rose 3% this year, so buying power fell 0.7%. Menu prices rose 3.5%. In Q3, quick-service sales grew 0.6% while traffic dropped 2.6%. Wholesale prices hit their biggest monthly jump in four years.

NFIB's optimism index sat at 97.9 in September, and 20% of owners named inflation their top problem. A net 31% raised prices and a net 31% plan to again. The Fed hiked rates last month, its first hike in three years, and December looks likely for another.