Business Loans for Retail Funding

Business Loans for Retail Funding
Ronis Gracie
on November 11, 2015
Read in 2 min

Running a retail business means facing a unique set of challenges when it comes to financing. When you need money to continue operating and working toward your goals for growth, a business loan can provide the necessary capital.

Covering Retail Expenses

In the retail sector, business owners must balance fixed expenses with those that fluctuate, including:

  • Rent and utilities
  • Payroll
  • Inventory
  • Regular and seasonal advertising
  • Building and equipment maintenance

You may seek a loan when machinery breaks down or the time comes to expand beyond your current location. If you encounter a situation like this, you may find it easier to work with an alternative online lender than to go the route of traditional financing.

Understanding Loan Types

As a retail business owner, you can obtain a loan through a bank or credit union, the Small Business Association (SBA) or an alternative lender. Before approaching your chosen institution, you should know which type of loan is required to meet your needs.

  • A working-capital loan may help to cover the costs of daily operations.
  • Perhaps more convenient than a working-capital loan, lines of credit serve a similar purpose and can be extended as needed.
  • The Small Business Administration guarantees “microloans” for other basics such as maintaining your inventory.
  • For large purchases, however, a traditional long-term loan is usually best.

Every type of loan has its own terms and interest rates set by the lender. Whether you’re buying or building commercial property, you’ll want to focus on retail loans, real estate loans or construction financing. On the other hand, equipment financing is ideal for purchasing new equipment and maintaining existing machinery.

Qualifying for a Retail Business Loan

To obtain any kind of business loan, you need a good credit score for yourself and your company. This is what lenders use to gauge the risk of lending to you, and it’s a big part of whether or not they decide to grant you a loan.

All financial details for the business must be in order, including a business plan with detailed information about your products and services, clear profit and loss statements, revenue projections, what you intend to do with the loan, and how the loan will benefit your business.

You must be able to present a precise estimation of the costs to be covered by the loan. Some lenders may also want to see your marketing plan to get an idea of what types of promotions you’re using and how they’re increasing revenue.

Overcoming Obstacles

Many small businesses have difficulty obtaining loans because of one or more problems:

  • Poor personal or business credit
  • Low cash flow
  • Improper planning or a lack of organization
  • Unrealistic projections

Any of these may cause a lending institution to deny a request for a business loan. Fortunately, there are alternative options such as online lending services that may be able to offer financial support if your business is turned down by a traditional lender.

Obtaining a business loan can help you pay off old debts, expand your existing enterprise or make it through tough times. With a clear understanding of loan types and requirements, you can approach lenders with confidence and walk away with the money that you need.

Ronis Gracie Finance Journalist

A serial entrepreneur experienced with building several small companies from the ground up and consulting for many others, Ronis understands the finer points of small business financing. He’s passionate about small business & is committed to simplifying small business lending for others.

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Important Disclosures. Please Read Carefully.

Persons facing serious financial difficulties should consider other alternatives or should seek out professional financial advice. This website is not an offer to lend. Lendgenius.com is not a lender or lending partner and does not make loan or credit decisions. Lendgenius.com connects interested persons with a lender or lending partner from its network of approved lenders and lending partners. Lendgenius.com does not control and is not responsible for the actions or inactions of any lender or lending partner, is not an agent, representative or broker of any lender or lending partner, and does not endorse any lender or lending partner. Lendgenius.com receives compensation from its lenders and lending partners, often based on a ping-tree model similar to Google AdWords where the highest available bidder is connected to the consumer. Regardless, Lendgenius.com’s service is always free to you. This service is not available in all states. If you request to connect with a lender or lending partner in a particular state where such loans are prohibited, or in a location where Lendgenius.com does not have an available lender or lending partner, you will not be connected to a lender or lending partner. You are urged to read and understand the terms of any loan offered by any lender or lending partner, and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you. By submitting your information via this website, you are authorizing Lendgenius.com and/or lenders and lending partners in its network or other intermediaries to do a credit check, which may include verifying your social security number, driver license number or other identification, and a review of your creditworthiness. Credit checks are usually performed by one of the major credit bureaus such as Experian, Equifax and Trans Union, but also may include alternative credit bureaus such as Teletrack, DP Bureau or others. You also authorize Lendgenius.com to share your information and credit history with its network of approved lenders and lending partners. For qualified consumers, our lenders offer loans with an Annual Percentage Rate (APR) of 35.99% and below. For qualified consumers, the maximum APR (including the interest rates plus fees and other costs) is 35.99%. All loans are subject to the lender’s approval based on its own unique underwriting criteria. Example: Loan Amount: $4,300.00, Annual Percentage Rate: 35.99%. Number of Monthly Payments: 30. Monthly Payment Amount: $219.36. Total Amount Payable: $6,581.78 Loans include a minimum repayment plan of 12 months and a maximum repayment plan of 30 months. In some cases, you may be given the option of obtaining a loan from a tribal lender. Tribal lenders are subject to tribal and certain federal laws while being immune from state law including usury caps. If you are connected to a tribal lender, please understand that the tribal lender’s rates and fees may be higher than state-licensed lenders. Additionally, tribal lenders may require you to agree to resolve any disputes in a tribal jurisdiction. You are urged to read and understand the terms of any loan offered by any lender, whether tribal or state-licensed, and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you.

Lender’s or Lending Partner’s Disclosure of Terms.

The lenders and lending partners you are connected to will provide documents that contain all fees and rate information pertaining to the loan being offered, including any potential fees for late-payments and the rules under which you may be allowed (if permitted by applicable law) to refinance, renew or rollover your loan. Loan fees and interest rates are determined solely by the lender or lending partner based on the lender’s or lending partner’s internal policies, underwriting criteria and applicable law. Lendgenius.com has no knowledge of or control over the loan terms offered by a lender and lending partner. You are urged to read and understand the terms of any loan offered by any lenders and lending partners and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you.

Late Payments Hurt Your Credit Score

Please be aware that missing a payment or making a late payment can negatively impact your credit score. To protect yourself and your credit history, make sure you only accept loan terms that you can afford to repay. If you cannot make a payment on time, you should contact your lenders and lending partners immediately and discuss how to handle late payments.