Close Menu
  • For Buyers
    • Retail News
    • Products & Suppliers
    • Ecommerce
    • Marketing & Management
    • Trade Show News
  • For Suppliers
    • Supplier News
    • Marketing & Management
    • Importing
    • Manufacturers
    • Warehousing
    • Finance
    • Show Exhibiting
  • Wholesale 101
  • Trade Show Calendar
  • Wholesale Products
Facebook X (Twitter) Instagram
Friday, May 9
  • Subscribe
  • Submit Content
  • About Us
    • Contact Us
  • Advertise
    • Display Advertising
    • Email Marketing Campaigns
    • Newsletter Advertising
    • Sponsored Content
    • Lead Generation Services
  • Top Product Sources
Facebook X (Twitter) Instagram
WholesaleCentral.com Blog
  • For Buyers
    • Retail News
    • Products & Suppliers
    • Ecommerce
    • Marketing & Management
    • Trade Show News
  • For Suppliers
    • Supplier News
    • Marketing & Management
    • Importing
    • Manufacturers
    • Warehousing
    • Finance
    • Show Exhibiting
  • Wholesale 101
  • Trade Show Calendar
  • Wholesale Products
WholesaleCentral.com Blog
Home»For Buyers»Retail News»5 Ways to Finance Your Retail Storefront
Retail News

5 Ways to Finance Your Retail Storefront

PublisherBy PublisherJuly 31, 2019Updated:January 20, 20235 Mins Read
Facebook Twitter Email
Share
Facebook Twitter Email

business owner doing financesby Eric Goldschein

Whether it’s always been your dream to own a brick-and-mortar shop or you’ve decided that it’s time to expand from pop-up shows and ecommerce to a full-fledged store, a retail storefront is a major endeavor that involves extensive planning, lots of financing, and a bit of luck in order to succeed.

Financing in particular is perhaps the trickiest aspect of starting a business. You’ll need funds to cover startup costs, and your ongoing overhead costs—from your lease (at least six months’ worth) to security deposits and utilities, plus the other costs of running your business such as securing inventory.

Few people have enough personal savings to fund these costs, and even if they did, putting up that much personal capital is a big risk. With that in mind, it’s crucial that you find responsible, affordable ways to finance your retail storefront without putting you or your burgeoning business at too much risk. Here are five ways to finance your first store:

SBA Loans

The Small Business Administration’s loan program helps small business owners get their hands on some of the best financing possible, by partially guaranteeing loans disbursed by a variety of banks and community lenders. There are a variety of SBA loan programs, each with different loan amount ranges, interest rates, preferred uses, and other factors. The three SBA loans most useful to retail store owners are as follows:

  • SBA 7(a) loans: The SBA’s most popular loan program has very few restrictions on what you can use the money for.
  • SBA 504/CDC loans: This program focuses on fixed asset uses, such as buying real estate or renovating existing locations. It would be perfect for business owners seeking a new storefront.
  • SBA Microloans: These “small” loans, capped at $50,000, are a great SBA loan product if you’re a new business owner without extensive business history. Most other low-interest loans require you to have a few years in business.

Keep in mind that SBA loans are competitive and require you to have a strong personal credit score and a plan for repaying your debt, among other qualifications.

Business Lines of Credit

A business line of credit is a bit like a credit card. You get access to a pool of funds that you can draw on at any time, paying off each draw as you go. Lines of credit are great because they are a flexible form of financing. If an unexpected cost arises when building out your storefront, or if you hit a cash crunch and are suddenly unable to pay for core costs like payroll or inventory, you can dip into your LOC rather than stiff your employees or default on a payment.

Equipment Financing

Do you need to invest in a specific piece of equipment, such as a computer that manages your inventory, a point-of-sale system, a printer, or a truck for deliveries? Equipment financing is a low-risk form of financing that’s great for new business owners.

With equipment financing, a lender passes along the exact amount you need to purchase a new piece of equipment. You then pay back the lender the principal plus interest over time, like a regular loan. The benefit of this financing is that the loan is “self-secured” by the equipment. If you default on a payment or are otherwise unable to pay off the loan, the lender will simply seize the equipment and your other assets won’t be at risk.

Inventory Financing

Another form of self-secured financing that may be even more useful to retail stores is inventory financing. Once you get your storefront up and running, you may not want to sink the rest of your liquidity into securing big inventory purchases—or you might not have the cash at all at this point.

Instead of grinding business to a halt, you can use inventory financing and let a lender lay out the money needed to replenish your stock. Again, if you fail to pay for whatever reason (and hopefully this is never the case), only this inventory will be at risk for seizure.

Grants

There are a multitude of small business grants available that you can apply for, with many of them specific to certain types of business or populations, such as women or veteran small business owners. Unlike loans, however, grants often have specific use requirements and smaller funding limits. That being said, it’s hard to argue with free money, in any context.

Grants are available from federal and state government agencies, local nonprofits, and even from corporations. Contact your local Chamber of Commerce to learn what’s available nearby, or consult this master list of 100+ small business grants.

You likely didn’t get into the retail business to be a fundraiser, or to fill out loan applications. But being a business owner means keeping an eye on your finances at all times, so you can stay in business for the long-term. Get things off on the right foot by securing affordable financing, or putting yourself on the path to acquiring some — you’ll be glad you did.

ABOUT THE AUTHOR

Eric GoldscheinEric Goldschein is the partnerships editor at Fundera, a marketplace for small business financial solutions. Eric has nearly a decade of experience in digital media and writes extensively on finance, marketing, entrepreneurship, and small business trends.

finance pop-up stores
Share. Facebook Twitter Email
Previous ArticlePet Parenting is Serious Business: Fur Baby Retail Trends
Next Article The August 2019 Issue of Independent Retailer Magazine is Available Now!

Related Posts

5 Essential Tax Season Preparation Tips

January 24, 2024

7 Tips for Wholesale Inventory Management

January 23, 2024

Prepare Your Business for Supply Chain Disruptions

December 30, 2023
Sign Up for Buyer Updates
WholesaleCentral.com

Join the Buyer's Network

Get news & updates only for retailers.

how-to
Wholesale 101 for Buyers

Amazon Return Pallets For Sale: How to Profit

11 Mins ReadUpdated:August 9, 2024

A big trend among some online sellers is buying Amazon return pallets and overstock and…

Retail News

5 Essential Tax Season Preparation Tips

10 Mins ReadUpdated:August 8, 2024

Are you ready for tax season? April 18 is approaching quickly, and many day-to-day decisions…

Ecommerce

7 Steps to Create Successful Shipping for Your Business

6 Mins ReadUpdated:August 8, 2024

by Sidney Karanja Today’s business environment is more globalized and complex than ever before. In…

Product News

Overstock Liquidations

6 Mins ReadUpdated:August 9, 2024

Overstock inventory refers to the excess goods or merchandise that a retailer has on hand…

Latest Posts

Crafting a Marketing Strategy for Electronics Retailers

January 21, 2025

Effective Digital Marketing Strategies for Health & Wellness Brands

January 21, 2025

Mastering Beauty Ads: 10 Strategies for Engaging Your Audience | Blog.Wholesalecentrl.com 

January 21, 2025

Jewelry Marketing Strategies: How to Attract Customers and Boost Sales in a Competitive Market

December 31, 2024

How to Open a Gift Shop: A Step-By-Step Guide

December 23, 2024

Online Marketing Calendar for 2025: Don’t Miss These Critical Dates

December 17, 2024
  • About Us
  • Subscribe
  • Contact Us
  • Advertise
  • Find Wholesale Sources
WholesaleCentral.com

Join the Buyer's Network

Get news & updates only for retailers.

Follow Us:

Copyright © 2025. Sumner Communications, Inc..

Type above and press Enter to search. Press Esc to cancel.