Retail business loans | Types, costs and requirements

Compare retail business loans

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Here’s how to get a loan to help you start a new retail business or buy an existing one.

Business loans for retailers
Finding the right loan is crucial when it comes to starting your first business or expanding into new markets. There are business loans for just about everything, from buying your retail space to solving short-term cash flow issues. If your business needs it, chances are there’s a loan available and our guide will help you narrow down your options so you can keep things running smoothly.

LoanBuilder, A PayPal Service Business Loans

LoanBuilder, A PayPal Service

Customizable business loans with no hidden fees.

  • Min. Amount: 5000
  • Max. Amount: 500000
  • One-time fixed fee charged over the life of the loan
  • Acclaimed customer service
  • Requirements: $100,000+ annual revenue, 1+ years in business, 600+ personal credit score

    How can a loan help my business?

    Finding the right financing can help you get your retail store off the ground or expand your operations. A business loan can help you finance whatever it is you need to make your business succeed, including:

    • Purchase equipment. The equipment your business needs can range from a laptop and bookkeeping software to industrial-grade restaurant equipment. If you need to purchase equipment, a business loan can cover the upfront cost and allow you to spread payments out over time.
    • Purchase inventory. Retail shops often need to buy inventory in bulk. A business loan can be used to stock your shelves and keep the racks full during a busy season.
    • Increase working capital. The day-to-day cost of a business can fluctuate rapidly depending on what your retail business handles. Whether you’re facing a dry spell and need a little extra or need to hire extra help during the busy season, a business loan can help you with your working capital.
    • Invest in marketing. The cost of new website design or a slick ad can add up quickly. A business loan can give you the money you need to hire the best talent so you can give your customers a reason to keep shopping with you.
    • Purchase real estate. If you’re ready to expand your retail business from online to a physical location, a loan can help finance the purchase of real estate.

    Loans to compare for your retail business

    Rates last updated July 22nd, 2018
    Unfortunately, none of the business loan providers currently offer loans for these criteria.
    Name Product Product Description Min Loan Amount Max. Loan Amount Requirements
    LoanBuilder, A PayPal Service Business Loans
    Customizable loans with no origination fee for business owners in a hurry.
    $5,000
    $500,000
    Annual business revenue of at least $42,000, at least 9 months in business, personal credit score of 550+.
    LendingClub Business Loans
    With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.
    $5,000
    $300,000
    2+ years in business; $50,000+ in yearly sales; No bankruptcies or tax liens; At least 20% ownership of your business; Fair or better personal credit
    OnDeck Small Business Loans
    A leading online business lender offering flexible financing at competitive fixed rates.
    $5,000
    $500,000
    Must have been in business for at least one year with annual revenue of $100K+. Must have a personal credit score of 500+.
    Kabbage Small Business Line of Credit
    A simple, convenient online application could securely get the funds you need to grow your business.
    $2,000
    $250,000
    Must have been in business for at least 1 year. Revenue minimum is $50,000 annually or $4,200 per month over the last 3 months.
    Lending Express Business Loan Marketplace
    $5,000
    $500,000
    At least 3 months in business and $10,000+ in monthly revenue. Your business might also qualify if it's been in business at least 6 months with $3,000+ in monthly revenue.
    National Business Capital Business Loans
    Get a large business loan to cover your financing needs, no matter what the purpose is. Startups welcome with 680+ credit score.
    $10,000
    $5,000,000
    Your company must have been in business for at least 6 months and have an annual revenue of at least $180,000.
    BizLoans.io Business Loan Marketplace
    Get connected with wide range of loan amounts and multiple loan types from reputable lenders.
    $20,000
    $500,000
    Must have good credit and at least 6 months in business.
    Fora Financial Business Loans
    No minimum credit score requirement and early repayment discounts for qualifying borrowers.
    $5,000
    $500,000
    Business age 6+ months. Monthly revenue $12,000+. No open bankruptcies.
    Excel Capital Management Small Business Loans
    Get personalized financing options that suit your unique business needs in just a few simple steps.
    Varies by loan type
    Varies by loan type
    Your business must operate in the US, be at least 1 year old and have monthly revenue of $15,000+.
    Balboa Capital Small Business Loan
    Short-term business financing with no minimum credit score or physical paperwork required.
    $2,500
    $250,000
    Must make $300,000 in annual revenue and be established for at least one year prior.
    LendingTree Business Loans
    Multiple business financing options in one place including: small business loans, lines of credit, SBA loans, equipment financing and more.
    Varies by lender and type of financing
    Varies by lender and type of financing
    Varies by lender, but you many require good personal credit, a minimum business age and minimum annual revenue.

    Compare up to 4 providers

    7 types of business financing to consider

    What type of financing does your retail business need to be better? By considering how these companies typically generate revenue and common expenses specific to the retail business, we’ve listed seven types of financing that could most benefit a retail business.

    Loan typeAmountsProsCons
    Line of credit$10,000–$1 million
    • Access funds when you need them
    • Interest charged only on the money you spend
    • Less risk than with a term loan
    • Freedom to negotiate fixed or ongoing terms
    • Good credit history required
    • Doesn’t provide long-term business financing
    • Monthly interest and fees apply
    Term loan$5,000–$500,000
    • Borrow a single sum that can be paid back over time
    • Fixed and variable rates available
    • Regular repayments required
    • Can be used to fund major purchases and expenses
    • Terms of up to 15 years or more available
    • Borrowing a larger amount comes with a higher level of risk
    • You will usually need to offer an asset as security for the loan
    • Not as flexible as other options
    Business credit cardUp to $20,000 per cardholder
    • Spend money when you need to
    • Pay down your debt through monthly payments
    • Great for managing your business day to day
    • Can earn rewards or frequent flyer points on your spending
    • Good credit history required
    • Interest charges can quickly accrue
    • Keep track of your spending so you don’t exceed the card limit
    • Annual fees
    Unsecured business loan$5,000–$300,000
    • Easy application process and fast approval
    • Quick access to the funds you need
    • No security required
    • Short- and long-term financing available
    • Early repayment often allowed
    • Higher interest rate and fees
    • Penalties if you miss a payment
    Merchant cash advanceUp to $250,000
    • Suitable for businesses that receive the majority of their payments by credit card
    • Quick and efficient access to funds
    • Don’t need to offer an asset as security
    • Sometimes available to borrowers with less than perfect credit history
    • Repayment amounts depend on your earnings
    • Can be more expensive than other business loan options
    • Plans usually only last for a maximum of 12 months
    • If sales figures don’t meet expectations, you may need to find money elsewhere to pay off the advance
    Commercial loanGenerally 60%–70% of the property’s value, but up to 80% in some circumstances
    • Helps you purchase a commercial property
    • Wide range of loans available
    • Flexible repayment options to suit your cash flow
    • Higher interest rates and fees than residential home loans
    • Security required
    Equipment financeThe cost of the equipment you need to purchase
    • The equipment you buy is used to secure the loan
    • Flexible payments
    • Tax deductible options available
    • Multiple fees apply
    • May require a consultant or specialist

    What option is best for my business?

    The right loan for your business depends on a number of factors, including:

    • Your needs. The loan you choose will vary depending on whether you want to buy a retail space, purchase equipment, manage cash flow fluctuations or satisfy a range of other financial requirements.
    • Your assets. If you have valuable assets you can use as collateral for a loan, you may be able to access a wider range of loan options or get a better rate.
    • Your credit history. While there are loan options available for borrowers with bad credit, having a good credit history improves your chances of finding a good loan at a low rate.

    Expenses to consider when opening a new retail business

    Starting a new business can be a huge undertaking that many people aren’t prepared for. To stand out, you need to have the capital to purchase everything you need. Understand the costs of setting up shop by factoring these common expenses into your loan decision.

    • Purchasing or leasing a retail space.
    • Store fixtures like furniture, shelving and display cases.
    • Store equipment like computers, cash registers and security cameras.
    • Hiring and ongoing payment of staff.
    • Initial marketing and advertising costs.
    • Purchasing inventory.
    • Office supplies.
    • Insurance coverage.
    • Internet, phone and power connections.
    • Professional legal and accounting services.

    Even if you’re not running a brick-and-mortar storefront, many of these costs still apply. There are also some additional costs that online retailers need to consider that some physical locations don’t. These include web design, SEO optimization and finding suitable warehouse space to store your inventory.

    The best way to wrap your head around the full cost of opening a new business is to put together a comprehensive business plan that outlines your startup costs and operating expenses. Include a realistic timeframe for how long it will take you to break even and start making a profit.

    Expenses to consider when purchasing an existing business

    If you’re buying an existing business, the good news is that the previous owners have already done some of the hard work for you. The bad news is that they may not have been running the business as successfully as possible. You may have some extra expenses to help your new retail store performs to its full potential that include:

    • The cost of buying the retail business.
    • The cost of purchasing or leasing retail space.
    • Improvements and upgrades to old equipment.
    • Upgrades to shop fixtures.
    • Purchasing new inventory.
    • Paying staff and hiring new team members.
    • Marketing and advertising costs.
    • Insurance coverage.
    • Professional legal and accounting services.

    Do your due diligence before purchasing an existing business. Consider why the current owner is selling and look at the sales, operating costs, profits, assets and liabilities of the business before you decide to buy.

    What types of retail businesses can get a loan?

    No matter what your store sells or your inventory, there’s likely a loan out there to finance your business. The list below is a short overview of the potential business that can find financing through a business loan.

    • Supermarkets and grocery stores
    • Convenience stores
    • Fashion retailers
    • Footwear retailers
    • Toiletries and cosmetics stores
    • Furniture stores
    • Homewares retailers
    • Appliance retailers
    • Electronics retailers
    • Sporting goods stores
    • Gift shops
    • Book stores
    • Discount and variety stores
    • Health stores
    • Jewelry stores
    • Toy stores
    • Pet stores

    4 tips to easily apply for a business loan

    Keep these four tips in mind when prepping for your business loan application.

    • Know your finances. Your loan application depends partly on your financial history. By knowing your score and debt-to-income ratio, you’ll be in a better position to present your business as another part of your financial future.
    • Determine why you need a loan. Every business is unique, so know exactly what you need a loan for. This guides you to a strong application with the right lender.
    • Find the right lender. No matter what type of financial institution you apply with, it’s got to be the right fit for your business. Between large national banks, smaller regional credit unions, crowd-funding and non-bank lenders, you should be able to find something that works for your financial needs.
    • Prepare your application. This should include your business plan, the financial history of you and your business and how your loan money will be spent.

    Compare business loans now

    Bottom line

    Finding a loan for your retail business doesn’t have to be difficult. Whether you’re starting from scratch, expanding your current operations or purchasing a business, you have loan options available to help you finance the next part of your career.

    Frequently asked questions

    Tim Falk

    A freelance writer with a passion for the written word, Tim loves helping people find the right products for them. When he's not chained to a computer, Tim can usually be found exploring the great outdoors.

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