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Complete Guide to Retail Business Loans and Financing

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By Erin Ryan Social Community Manager, Senior Writer and Editor at Fast Capital 360 Reviewed By Mike Lucas
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Loan Overview

  • Coins stacked on table with blue arrow pointing up
    Loan Amount Up to $500,000
  • Calendar image appearing as though the page is being flipped
    Estimated Repayment Terms 1-5 Years
  • Speedometer icon
    Interest Rate Starting at 7%
  • Dollar sign in circle
    Speed of Funding As fast as 1 day

Small businesses are the backbone of the U.S. economy and retail is no exception. So much so that 98% of retail establishments are small businesses, according to the National Retail Federation.

Keeping customers happy has never been more challenging, though, as many view shopping as much an entertainment experience as a buying experience. Staying on top of your game is crucial, but often that requires funds, which can be hard to come by without a retail business loan.

Here are some reasons you might turn to financing as well as funding options to consider.

Financing Your Retail Business for Success

No one ever said that owning a business was easy. Running a retail establishment requires putting in long hours, investing in products people want, hiring staff, marketing your store and more. A retail store business loan could help you fund any of the following needs, among others.

Buy Inventory

The retail industry often requires keeping up with the latest trends to remain relevant and give customers what they want. Seasonal changes and rising demand can lead you to invest in new product lines or replenish existing merchandise.

Retail business funding can help with any purchases you need to keep popular items stocked. You can even use it to offset inventory storage costs.

Market Your Business

Sometimes you need to promote yourself to promote sales. If that’s the case, you could find yourself in need of funds to help advertise your brand in the following ways:

  • Circulars
  • Billboards
  • Radio advertising
  • TV advertising
  • Newspaper advertising
  • Online marketing
  • Branded merchandise
  • Logo design or redesign
Do you need a loan for your small business?

Manage Payroll or Hire Staff

Maybe you need help covering payroll one month. Or perhaps it’s time to hire temporary staff for your busy season. Or better yet, you need extra hands on an everyday basis to help your business grow. Unless you’re able to find someone who’s willing to work for smiles alone, you’ll need capital to support your staffing and payroll needs.

Cover Rent or Expand Locations

Among the top 50 metro areas nationally, the average price per square foot was $200 at the end of the third quarter in 2019, according to REIS, Real Estate Solutions by Moody’s Analytics. That’s $200,000 annually for a 1,000 square-foot space.

With ebbs and flows in retail sales, you could find yourself experiencing dips in revenue in slow months. A business loan for retail store rent could help cover your lease until things pick up.

Purchase Store Fixtures

Investing in mannequins, merchandise cases, shelving units, nesting tables, bins, cabinets and more can add up. One fixture alone could be a few hundred to several thousand dollars. If your displays need a refresh, but you don’t want to tap into your cash reserves, a loan for your retail shop could be just the fix.

Invest in an Ecommerce Storefront

While Amazon’s got the foothold, you can leave a footprint. Whether you’re strictly an e-retailer looking to grow or a brick-and-mortar store establishing an online presence, you may need funds to ramp up your efforts.

Retail business finance options can help you with the following purchases:

  • Point-of-sale system
  • Customer relationship management software
  • Inventory management software
  • Omnichannel software and support
  • Augmented reality application development
  • Ongoing tech support

Best Financing and Business Loans for Retailers

When it’s time to revamp inventory or purchase new products in preparation for a busy season, many small retailers turn to financing to get their share of what’s soon to be a $5.94 trillion industry, according to Statista. Here are financing options and loans for retail shops to consider.

Business Line of Credit

If you’re looking for a financing safety net for times when you least expect expenses to pop up or just want funds to cover a large purchase, a business line of credit could be the solution. It’s a type of financing for retail stores that can be used for nearly any business need.

Think of it along the lines of a credit card for which you’re pre-approved with a specific dollar limit. You don’t have to use it, but you have access to it when you need it.

You can spend a portion of your total credit limit or all of it at one time. As you pay down the purchases you’ve made against your line of credit, your limit is restored concurrent with the amount you repay.

Working Capital Loan

Working capital in the retail business sector is vital but often insufficient. When you need a way to get from one month to the next, a working capital loan acts as the bridge you need to cover short-term operational expenses.

While an umbrella term for different types of financing, generally, these funds are meant to be repaid quickly and are usually quick to fund. While they aren’t typically used to cover long-term business investments, you could use funds for such expenses as rent, payroll or debt payments.

Business Term Loan

Term loans offer funding solutions for nearly any business need, such as inventory purchases, debt refinancing, expansion costs and more. You could repay your loan in months with a short-term loan or years with a long-term loan. Unlike a line of credit, borrowers pay regular installment payments, which could be daily, weekly or monthly, depending on your specific terms.

SBA Loan

Loans backed by the U.S. Small Business Administration (SBA) have long repayment terms at some of the most competitive rates. While the funding process can be drawn out and paperwork requirements extensive, this could be a great option if you’ve been denied for a conventional bank loan. Because the SBA guarantees a certain percentage of all loans, lenders face less risk, which means they’re more apt to loan you funds.

Merchant Cash Advance

If your credit score has seen better days and you need capital fast, consider a merchant cash advance. Though not a loan, this short-term alternative financing option provides those approved with an advance of funds based on projected revenue. Payments are usually fixed and made on a daily or weekly basis.

Equipment Financing

If you need funds to buy or lease equipment or fixtures for your store, such as computer systems or merchandise display cases, you have options. In some cases, you can access sufficient funds to cover the total cost of your purchase. That’s because traditionally, the equipment you intend to buy serves as collateral for the loan.


Where to Find a Loan for a Retail Shop

Searching for retail business funding can lead you to a lot of places. Here’s an overview of two types of lenders you’ll often encounter.

Conventional Lenders

Conventional lenders, such as banks and credit unions, are probably the first option that comes to mind when you begin your search for business financing. They’re known for competitive interest rates and longer repayment terms.

That said, they’re also known for having strict criteria to qualify, including meeting high credit score and revenue minimums as well as collateral requirements. The application and funding process can also take some time.

Alternative Lenders

Where alternative lenders compete is the time to fund. They’re also able to offer options if you have a less-than-stellar credit score and don’t have personal assets to provide as collateral. If you need capital fast, complete an easy online application and you could have access to financing the same day your application is approved.


What You Need to Apply for Small Retail Business Loans and Financing

With Fast Capital 360, you can apply for financing with the following qualifications and documentation:

Minimum Requirements:

  • 500+ FICO score
  • 6 months in business
  • Annual revenue of $120,000

What You’ll Need to Get Started:

  • Basic information about your business and yourself
  • 6 most recent monthly bank statements

Estimate terms for every type of financing

Loan qualifications

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    Time in Business 1+ Year
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    Annual Revenue $200,000+
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    Credit Score 560+

Loan qualifications

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    Time in Business 1+ Year
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    Annual Revenue $200,000+
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    Credit Score 600+

Loan qualifications

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    Time in Business 1+ Year
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    Annual Revenue $75,000+
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    Credit Score 540+

Loan qualifications

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    Time in Business 2+ Years
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    Annual Revenue $160,000+
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    Credit Score 620+

Loan qualifications

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    Time in Business 1+ Year
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    Annual Revenue $150,000+
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    Credit Score 600+

Loan qualifications

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    Time in Business 4+ Months
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    Annual Revenue $100,000+
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    Credit Score 500+

Loan qualifications

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    Time in Business 2+ Years
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    Annual Revenue $50,000+
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    Credit Score 650+

Loan qualifications

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    Time in Business 1+ Years
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    Annual Revenue $75,000+
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    Credit Score 540+

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            How much do you need?

            Estimated Interest Rate

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            Loan Term

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            This is an estimation tool that provides a range of possibilities depending on creditworthiness and terms selected. Terms can be adjusted to increase or decrease your payment. To see all our loan calculators click here.

            Apply with Fast Capital 360

            Retail business loans and financing from Fast Capital 360 can help you keep your ecommerce or brick-and-mortar store going and your customers happy.

            Quick and Easy Application

            Get started today. Complete our simple online application in about the time it takes your customers to check out.

            Multiple Loan Offers

            Our nationwide network of lending partners means you’ll have more offers to review. Even better, you could have offers within hours of applying.

            Expert Advice

            One of our Business Advisors will reach out to you after you submit your online application and guide you through the process. They’ll review your offers with you, so you can choose which option is best for you.

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