Sectors: Retail Loans
Choose the right loan for your online or physical retail business
Retail sales are an exciting sector of the market, with huge earning potential and a chance to start a business that is unique to you.
With online businesses growing and the high street still a great place to be based, you have the chance to grow a business that really sells itself. However, making a big splash in retail sales can be difficult.
There are a number of factors to consider: some are the types of concerns found in all new business enterprises and some are particularly relevant when it revolves around retail. When challenges like these arise an injection of capital can be vital, but how do you find the right loan for your retail business e.g. loan for your garage?
What you need to know to get loan for your store
If you are reading this blog, the chances are that you are either considering a leap into the world of retail or you have already began to build your business and are looking to start strong, or even to stay afloat.
With the number of small businesses that do not make it out of second gear, and with traditional banks and lenders growing more frugal, it can often seem like an uphill task.
Since the financial crash of 2008 and as the market remains uncertain, these lenders are often unwilling to gamble on businesses that possess potential and little else. Lenders will also seek to evaluate your personal finances and demand collateral before they even consider handing over the funds you are seeking.
Whether you are setting out on a small business venture, or you are looking to take the next step with an existing business, tracking down the right way to finance your venture is essential.
Financing issues for retail businesses
So what are some of the issues you may be facing (or at least the ones you want to be prepared for)?
In retail, there are a host of factors that could require you to increase your working capital. Staff turnover is often high, and seasonal demand and sales can require extra hires to pick up the extra slack.
Seasonal work also applies to purchasing of stock. Making large bulk orders of new clothing and accessories, for example ñ especially if this is to take advantage of out of season pricing offers ñ also means a swift and easy access to cash is vital. You may also need to increase stock to meet big orders.
There are also other factors to consider.
Whether you are a new retail business or one looking to build, there are expansion costs to factor in. Perhaps you are looking for a larger premises from which to operate: this is likely to require a large amount of working capital to make the change and to keep your sales ticking over during the transition. Maybe there is specialist equipment needed in your store or through your distribution.
Rates may have risen, a supplier may have let you down, or perhaps the competition is getting fierce and you need capital to fight back. Marketing and advertising is another important cost to consider.
This can be a great way both to put an emerging business on the map or to increase the presence of an ailing store.
The role of technology for retail businesses
Technology can also play a massive part in retail stores.
Whether this is contemporary payment methods, improved IT systems or – most importantly ñ Point of Sales (POS) systems and hardware, it can be an area of investment that requires a significant outlay.
Online sales are another factor for retail, and organising the distribution, ordering process and keeping websites and social media current, up to date and working seamlessly can be the different between struggle and success.
But as with the other areas listed above, this requires a level of investment that may be beyond you and your retail businesses financial capacities. How can you bridge the gap and give your retail sales a step in the right direction?
Technology can actually play a massive part in ensuring your business has the working capital to make the changes, additions and more to be a major player. When traditional lenders, high street banks and credit unions fail to deliver, it is time to look elsewhere and look to the future. A time to embrace the latest in technology with smart funding that is easy to access, without the rigmarole of slow processing, impersonal service and rigid repayment structures that are found in traditional bank loans. Not only are these traditional loans hard to obtain but they afford no flexibility. In the hectic retail market flexibility is as crucial as funding in the first place.
Power your sales with a merchant cash advance loan
A merchant cash advance loan is not your typical bank loan.
By using technology to closely monitor credit card transactions in your business, a merchant cash advance calculates the right amount of money that your business needs to grow and makes sure that the repayments are manageable. These repayments are reviewed based on sales.
So when business is booming, the repayments are met to ensure your loan is taken care of. But when business slows, the repayments are lowered so that you are not crippled by fees that cannot be met.
Advantages of merchant advance loan
But the advantages with a merchant cash loan do not end there.
Firstly, the application process is far simpler and quicker than for a traditional banking loan.
No long drawn out meetings and endless, expensive phone calls: just a fast, simple decision that can take minutes.
You are also able to access your money instantly. Traditional loans can often takes weeks or even months to facilitate. But if you quickly need to buy stock to fulfil a large order, or you need to hire extra staff to keep operations running smoothly, a merchant cash advance will get you the funds you need as you need them. In a volatile market, this can make all the difference.
Merchant cash advances for a brand new business
Merchant cash advances typically require no collateral and even if your credit history is poor you can still get access to the money you require. For a brand new business without a long history of past sales and without an established name, this is incredibly useful. Because the loan and repayments are calculated on current credit card transactions, you can borrow safe in the knowledge that the repayments will be as flexible as you need them to be. A typical loan from a high street lender will closely scrutinise your past credit, your current business and put you on a repayment system that is fixed. A merchant cash advance will give you the working capital you and your business needs whatever your circumstances.
Flexibility of merchant cash advance
Flexibility is also important when it comes down to what your money is spent on. A business loan for your company provided by a traditional bank or credit union will typically require a business plan with a strict idea of where funds are to be allocated. A merchant cash advance is far more fluid, and can be used to simply raise capital or to improve a number of aspects of your small business. And there is no limit to the number of loans you take out. Unlike your average bank loan, you can add to a merchant cash advance far quicker and easier. Accessing the money you have borrowed is also a far more instant process. So if things take a turn for the worse or you sense a business opportunity that demands action, your money can be reached in no time at all.
Advantages to securing a merchant cash advance loan
There are so many advantages to securing a merchant cash advance loan. It is important to remember that as well as offering freedom and flexibility that is not offered by the usual business loan, this is also a loan that is geared towards retail sales. By using the extensive data gathered from credit card sales, you are working with a loan that understands the nature of the retail market. The pressure of seasonal downturns and upward swings, the need for stock, the turnover of staff and the unique demands faced by your retail business can be met, because your loan observes these changes in real time. Rather than having to justify your business model, your sales, your knowledge of the market place to a banker, you provide raw data that adapts to you and your businessí needs.
Why A merchant cash advance
If you have struggled to find a loan in the past, if your credit history is poor, if your business is brand new, if you are struggling to keep up with your rivals, if a large order has left you short of inventory, if your rent is rising, if marketing costs are spiralling, if staff need to be hired; for these and many more reasons, a merchant cash advance can be a godsend. Growing your retail business with an injection of capital that is fast to process and easy to repay could be the start of an amazing business adventure, rather than juddering to a halt before it has even begun.