There are numerous ways that you can use retail business financing to grow your business, which is why we’ve compiled this list of five ideas. After you receive a loan for your retail business, you'll find that the possibilities are limitless!
Retail Business Financing Options:Before you determine how to utilize additional financing, you should weigh all of your options, including:
- Small Business Loans: Many alternative lenders provide small business loans to retail businesses in a range of amounts and repayment terms.
- Merchant Cash Advances: Most likely, your business accepts credit card payments. If this is the case, you may qualify for this lump sum financing option, which you'll remit using your future credit card sales.
- Business Lines of Credit: To finance your retail business, you can use a credit line to afford necessary purchases.
- Small Business Administration (SBA) loans: The SBA provides loans to various types of retail businesses. Their most popular option, the SBA 7(a) loan, comes with low interest rates. However, you'll first need to approve that you can't get approved for traditional funding options.
- Equipment Financing: If you need financing to afford necessary equipment, you may benefit from an equipment loan or lease.
- Credit score
- Annual revenues
- Time in business
- Use of funds
- Tax returns
- Ability to submit collateral
How to Use a Retail Business Loan:Now that you've weighed your funding options, keep reading to learn how retail business owners like you use retail financing.
1. Purchase New InventoryIn order to run a successful retail business, you’ll need the right amount of inventory that appeals to your customer base. With retail business loans, you can purchase new inventory, so that you have more to offer your clientele. If you frequently run out of certain types of inventory, you can also use your retail business financing to stock up. Without consistent, quality inventory, your business may suffer, so consider using your financing for this cost.
2. Open a New Retail LocationIf business is booming and you’re unable to serve your growing customer base, it might be time to start an expansion project. Opening a new location could be a great business opportunity that’ll allow you to serve more customers, especially ones that don’t frequent the area of your current location. Of course, starting an expansion project can be expensive. You’ll need to make investments such as:
- Purchasing real estate
- Hiring more staff members
- Purchasing inventory
3. Pay for Advanced TechnologyUtilizing retail technology can make you and your employees’ jobs easier, and allow you to provide a better experience for customers. Plus, having new technology to unveil to your customers could set you apart from your competitors. If you’d like to pursue retail technology solutions, consider making paying for expenses such as:
- Creating a mobile app
- Purchasing a CRM system
- Offering progressive payment services (like Apple Pay)
4. Hire More EmployeesDoes your retail store feel understaffed, making it challenging to assist all your customers? Or maybe you need more employees for other areas of your operations, like the stockroom? Regardless, you may benefit from using your retail business financing for recruiting new employees. As you likely know, the retail industry is one that heavily relies on the hard work and knowledge of its employees. Building a strong team is imperative to the future of your retail store. Using your retail loan, you can hire a recruiter, list job postings online, and have money left over to pay for employee wages and benefits.
5. Update Your Store’s InteriorYour retail store’s physical appearance will affect customers’ first impression of your establishment. Boring décor, outdated furniture, or an overall drab feel can deter customers from shopping at your store. So, if your business’s interior could use a makeover, then it may be a good idea to use a retail business loan for these updates. Updating signage, paint colors, and your store’s layout can give your business a fresh look. Not only should you try to fix the aesthetic of your business location, you can also work on re-organizing the layout of your store. Whether it is using a planogram template to organize shelves, or positioning items near the check-out counter to encourage last-minute purchases, there are many ways to rearrange.
6. Invest in Your Marketing StrategyIf you want to reach your target market, it’s important that you find ways to market your retail store. Using your term loan, you can pay for marketing expenses, including:
- Sponsored social media posts
- Ad space in local publications
- Direct mail pieces
- Branding updates
- Email marketing programs