Retail business loans

Which loans work best for retail?

A line of credit works best for a store with a repeating seasonal pattern, because you draw before the holiday buy and repay in January. Inventory financing works best for a large one time purchase where the stock itself is the collateral. Merchant cash advances fund fastest and repay from card sales, but cost the most.

• Line of credit: $10,000 to $500,000, 8% to 30% APR, draw and repay as needed.
• Inventory financing: 50% to 80% of inventory value, 8% to 30% APR.
• MCA: factor rates of 1.2 to 1.5, 10% to 20% of daily card sales.

For a store opening or buying a competitor, SBA 7(a) is the long term answer.

What do lenders like and dislike about retail?

Lenders like card sales they can verify, daily deposits that match the point of sale report, inventory that turns four or more times a year, and a lease with several years left in a location with foot traffic. They like a store that has been through two holiday seasons and shows the same pattern both years.

They dislike thin margins, inventory that goes out of style or expires, a single location with a short lease, and sales that are sliding month over month. Cash heavy stores are harder because deposits understate revenue. Stacked advances are common in retail and are the fastest way to lose access to cheaper products.

How much can a retail store borrow?

Working capital lenders typically advance 50% to 100% of one month of sales, so a store doing $40,000 a month usually sees offers of $20,000 to $40,000. Inventory lenders advance 50% to 80% of the cost of the stock, less for fashion and perishables. Bank lines are sized at one to two months of sales for established stores. SBA 7(a) is sized by cash flow and can reach $5 million for an acquisition or a multi store expansion, though most retail SBA loans fall between $100,000 and $750,000. See how much can I borrow for a rough range and remember that inventory you cannot sell within a season is debt, not an asset.

What documents will you be asked for?

For an advance or a short term loan, three to six months of bank statements and card processing statements are usually enough. For a line, inventory financing or SBA, expect to add:

• Point of sale sales reports by month for at least 12 months
• An inventory report with cost, retail value and age
• Two years of business and personal tax returns
• Year to date profit and loss and balance sheet
• Your lease and any renewal options
• Supplier quotes or purchase orders for an inventory loan
• A plan and projections for a new store

The document checklist lists the rest.

What are the common uses of funds?

Retail loans usually go to one of these.

• Seasonal inventory: a $75,000 line draw in September to stock for the holidays, repaid by February. See buying inventory.
• A second store: an SBA 7(a) loan for a $250,000 build out, fixtures and opening stock.
• Fixtures and point of sale: $30,000 of shelving, lighting and registers financed over four years.
• A renovation: a short term loan to refresh the storefront before a lease renewal.
• Buying a store: an acquisition loan with 10% down, sized to the store's historical profit.

What usually gets a retail application declined?

The most common reasons are sales that have declined for three months or more, negative balance days in the bank statements, and existing advances taking a large share of daily deposits. Lenders also decline on a lease that ends within a year, inventory that is mostly aged or seasonal stock from a prior year, and an owner credit score under about 600 for online products or 650 for banks. New stores open under six months are declined by almost everyone except equipment lenders. Mixing personal and business spending in one account is another common decline, because the lender cannot verify the numbers. Why loans get denied covers the fixes.

How to apply

Apply once here with your bank and card statements, your point of sale report and your lease, and your application reaches line of credit, inventory, advance and SBA lenders together. Or connect your AI assistant to our MCP server through the agents hub: it can read your reports, fill the application and submit it. It is free to the store, and lenders pay us only when a loan funds, so we are paid the same whichever offer you take.