People Also Ask:
Do Retail Store Business Loans Require Collateral?
No, collateral is not required for Retail Store Business Loans. However, if you can provide collateral, you may be able to offset issues with credit or cash flow that would have otherwise resulted in higher rates or lower borrowing amounts. Before assuming you can provide collateral, contact the business loan provider to make sure your type of collateral is accepted. And the value of collateral might not directly reflect your permitted borrowing limit. For example, $10,000 worth of collateral might be able to get you a $6,000 loan with a competitive interest rate.
How Do You Qualify For Retail Store Business Loans?
This depends on where you apply and the product you have in mind. If you’re looking for a bank loan, you’ll need excellent credit, perfect cash flow, collateral, plenty of money in the bank, high annual revenue, and at least two years in business.
Products from companies like United Capital Source are much more accessible. Your ability to meet the requirements mentioned above will determine your borrowing amount, rates, and terms. But falling short in any (or more than one) of these areas won’t stop you from qualifying from multiple products. With some products, your credit score is practically irrelevant. For example, eligibility for a Merchant Cash Advance is based entirely on the size and volume of your debit and credit card sales.
Can I Get a Business Loan To Open a Retail Store?
Banks sometimes offer SBA 7(a) loans for new businesses. However, you’ll have to meet a series of requirements. For example, eligible borrowers must have reasonable equity to invest. Ideally, this means that you’re currently operating another profitable retail store. But this could also mean investing your own personal equity, like real estate.
Also, you must prove to the bank you have no other viable sources of financing. In other words, the bank will likely ask why you didn’t just use your savings account to fund the business or apply for a personal loan.
What Types of Retail Stores Can Get Business Loans?
Business loans are available for all sorts of retail stores, including (but not limited to):
- Convenience stores
- Fashion retailers
- Footwear retailers
- Toiletries and cosmetics stores
- Furniture stores
- Homewares retailers
- Appliance retailers
- Electronics retailers
- Sporting goods stores
- Gift shops
- Discount and variety stores
- Health stores
- Jewelry stores
- Toy stores
- Pet stores
Can I Get a Retail Store Business Loan With Bad Credit?
Yes, four out of the six products mentioned above are accessible for borrowers with bad credit. Your rates may be higher, and your terms may be shorter because bad credit makes you more likely to default. However, if you have strong cash flow or can provide collateral, your bad credit may have less of an impact on your rates and terms.
The only two products that are not accessible with bad credit are Business Term Loans and SBA Loans. These products carry high borrowing limits, low rates, and long terms. The other five products usually carry shorter terms and are much easier to repay. We can also customize your terms and payment frequency to ensure that you can make payments while staying current on other bills.