With the retail sector becoming highly competitive, companies are looking for ways of attracting more customers and exploring newer markets to remain competitive and gain more profits. Any business on an expansion spree needs funding to achieve and implement its objectives. It might be easy for big retail outlets to get the funding they need based on their reputation and ability to convince lenders.
Sadly, small and medium retailers cannot enjoy similar privileges. With their limited reach and resources, they cannot raise funds through banks and other traditional resources. They have to explore alternate avenues to get the funds they need to expand and stand up to their more resourceful competitors.
What Are The Alternative Funding Options Available
Retail merchants can apply for working capital! loans through alternative funding methods and use the loan to shape their expansion plans. Working capital is funding for meeting short-term commitments, but it can be utilized to improve your cash flow or expand your footprints to newer markets.
Small businesses can also raise money through real estate merchant cash advances. This is a type of alternative funding in which funding is provided using the business's real estate assets as collateral. The real estate must have the equity to cover the loan applied for. It doesn't matter if the property is commercial or residential.
Offer Real Estate As Collateral
If the retail business! can offer premium real estate assets as surety for the loan, they can get approved for a substantial amount. The loan term is of two years or more. This also works to the advantage of the borrower as the payments are low when compared to other types of funding where there is a considerable element of risk involved in lending.
Retail businesses can raise a loan through another popular alternative funding option. SBA 7(a) loan is a government-backed loan designed specifically to meet the financial needs of small and medium businesses, including retailers. The loan is offered through traditional lending sources and through alternative lending agencies. The loan is available on easy terms and has simple eligibility criteria.
Retail loans! requirements have a broad range depending on the type and scale of retail business. By using the SBA 7(a) loan option, retailers can raise any amount they need to push their business ahead to greater heights. The maximum amount that can be approved in this loan category is five million dollars. It can be used for the expansion of your stores or any other business-specific expenses.
To be eligible for SBA 7(a) loan!, your retail store must be a for-profit model and have fair equity for investment. All US-based retail businesses can apply for and avail of a retail loan through the SBA route.
Choosing the right retail store fundin! agency is crucial if you want to improve your chances of getting approved for retail funding. Make sure your documents and papers are in order to get your loan approved successfully without any glitch.