See Your Loan Options
A retail business loan can provide small businesses with funds to manage their capital flow, cover day-to-day expenses, fulfill seasonal demand, and more. There are a variety of different loan options available to help fund or expand your business.
Here's what you need to know about retail business loans.
A retail loan is a type of business loan that provides funds specifically to retail shop owners who need financial assistance. It can provide funds to manage capital flow, cover the day-to-day expenses, fulfill seasonal demands, marketing expenses, pay employees, and more.
Retail is often driven by consumer trends within the current marketplace. Sometimes customers request special items or you may need to upgrade your point of sale system to keep up with demands. When funds are not available right away, retailers often utilize a retail business loan to cover these required expenses.
A shop owner can also use a retail business loan to pay employees during a slow season, invest in marketing, and buy items to better streamline their business. Luckily, there are plenty of different loan options available to help keep your business afloat within the retail industry.
There are several different types of retail loans available to help small and growing businesses expand within the retail industry. Retail business loans include:
Equipment can include such things as phone systems, computer monitors, printers, copiers, furniture, tools, vehicles (for commercial use), specialized machinery, industrial equipment, and more.
Any small or growing business can always benefit from an additional source of capital to enhance their business. There are several reasons a retail business owner would look to acquire these types of loans, including:
There are several determining factors taken into consideration to determine your qualifications for these loans. To help review the various loan options, we've taken the liberty of providing the requirements for the loans listed above.
According to the U.S. Small Business Administration, the 7(a) Loan Program is the SBA's most common loan program. To be eligible for this particular loan, businesses must meet the following requirements:
The SBA 504/CDC Loan Program, provides long-term, fixed-rate financing through Certified Development Companies (CDCs), SBA's community-based partners who regulate non-profits and promote economic development within their communities.
To be eligible for this particular loan, businesses must meet the following requirements:
These loans cannot be made to businesses engaged in nonprofit, passive, or speculative activities.
Similar to term loans, a business line of credit will require financial records and documents to determine the financial health of your business. At a minimum, some lenders will require your business to be operational for at least six months and able to earn $25,000 in revenue. Depending on the lender, a minimum credit score of 500 or higher may be required to qualify.
During the application process, lenders typically require business line of credit applications to provide information such as personal and business tax returns, bank account information, and business financial statements. By partnering with a lender, businesses can obtain their business line of credit within a matter of days whereas banks generally have a longer wait time.
Short-term loans can help businesses obtain funds quickly to cover immediate expenses, equipment, payroll, emergency repairs, and other general business needs. These loans are not intended for large, significant needs such as purchasing real estate or acquiring another business.
The application process requires proof of ownership of your business, financial statements, tax information, P&L statements, and a copy of your driver's license. Lenders will also check your business and personal credit as well. Once approved, businesses can obtain their funds within 1-2 business days.
With equipment financing, you will work with a lender to secure your loan. Generally, they will require you to bring a quote detailing how much the new or used item will cost, or documentation of items of comparable value and utility. Most lenders will require three years of tax returns for the business, the purchase agreement of the equipment, personal financial statements, identification from each owner.
Inventory financing can be considered a line of credit or a term loan used to purchase the inventory your business needs to operate. Inventory financing can be a good funding option for businesses that need to purchase inventory to prepare for a busy season, meet an increased need in customer demand, or cover short-term cash flow gaps. This type of loan is designed to be a short-term financing solution.
Businesses do not need to be established to be eligible for inventory financing. Most lenders will require companies to be up and running in a minimum of six months to a year to qualify. Though every lender is different, lenders may require businesses to maintain an annual revenue of $100,000 and a minimum business or personal credit score of 600 or more.
See Your Loan Options
Not only can retail business loans provide the required funding, but they can also offer other perks that can benefit you long-term as a business owner. Most retail business loans may offer competitive interest rates, predictable monthly payments, and credit building.
These types of loans can allow business owners to invest and accelerate their growth. Keep your shelves stocks and move your business forward through the utilization of a retail business loan.
At First Union Lending, we have an unwavering belief that small and medium-sized businesses deserve the right to access the capital they need to succeed.
Our goal is to build long-term, lasting relationships by providing business owners with what they need when they need it. We pride ourselves on being educated, knowledgeable, and caring when it comes to how we conduct business. We have voluntarily acquired much of the same licensing required by traditional banks to cement our fiduciary responsibility to our clients and our work culture.
We are here to consult, help you save, and guide you and your business to success.