Gift Certificate Financing

Description

"Rover’s Restaurant is implementing an innovative method of raising capital for their expansion plans. They are offering people gift certificates of $1,000 that are worth $1,305 in food."

More details at http://www.slowmoneynw.org/2010/07/rovers-restaurant-offers-gift.html

Comment from Alex Moore:

"This is also similar to how a Community Supported Agriculture (CSA) business operates. A customer commits to pay a certain amount of money every month or week for a certain amount of product every month. This system answers a critical cash flow issue for the farmer and adds stability to their sales as well as helps them determine more accurately what seeds to plant. The buyer gets a stable supply of food and can plan meals around the deliveries.

This ‘pre-pay’ method of raising capital can be attractive to both customer and restaurant. The customer gets more food dollars than they pay, while the restaurant gets to utilize the time value of money (loosely, having money in hand today is worth more than the same amount of money in hand later, same as the old saying “a bird in the hand is worth two in the bush”)." (http://www.slowmoneynw.org/2010/07/rovers-restaurant-offers-gift.html)

More Information

For more information see http://www.rovers-seattle.com/ and scroll down to “Pre-Purchase Gift Certificates.”