Business Loan for Retailers
Retailers needing finance
While the retail sector is coming off an annual peak, in the wake Black Friday, Cyber Monday and Christmas sales, retailers might be feeling good but those increased sales came with increased costs.
Overtime payments to staff, increased operating costs because of extended trading hours and all that extra stock you ordered in preparation needs to be paid for. And when those extras are covered you may well be back where you started before the end-of-year sales rush.
Those peaks in the retail season are often matched by troughs. And it’s during those troughs that you need to prepare for the peaks. That makes cashflow extremely challenging.
Leading into peak sales periods, you’re likely to need to invest in your business. While the peaks are times when revenues are up, they’re also periods of intense competition. That means you need to invest in more marketing and advertising, dedicate resources to updating the look of your online and physical stores, and purchase more stock to ensure you can meet your customers’ needs. And while you may be confident of payback, having the funds in place to take advantage of the opportunity ahead can be a problem.
That’s where careful planning and choosing the right partners for your business matters. Establishing great supplier relationships can assist with establishing lines of credit so you can pay for stock after the sale period. You may even be able to enter in arrangement where they will take back unsold items.
But those sorts of contracts may not always be possible.
In order to pay for new capital items, such as updated shop fittings and an updated point of sale and inventory system, you may need to look at other financing options. While traditional lenders, such as banks, have been the first port of call for many businesses, they are rarely business friendly.
With retail being such a challenging sector, old school lenders often focus on the risks and not the potential opportunities. That means their lending processes are long and complex as they seek large amounts of data that can sometimes be hard to gather in a short time. Rather than focussing on your needs, their eyes are firmly fixed on making sure their interests are protected.
Retailers looking for finance to help them periods of challenging cashflow and to support business improvements and expansion need a lender that’s responsive and understands their needs.
That means a lender that’s acquainted with what retailers need rather than collecting a bunch of hard-to-access information and doesn’t inundate you lots of forms to fill in and long waiting periods.
When you’re looking for a finance partner, you’re looking for the money to arrive promptly and not days or weeks later.
Once you identify a lender that’s understands your needs, you need to determine what sort of loan will work best for you. Broadly speaking, there are two types of loans financial institutions offer; unsecured loans and secured loans.
An unsecured loan
doesn’t require you to use any assets as collateral for the loan. As this shifts some of the risk away from you – you don’t have to use an asset as security, the lender offsets its risk by charging a moderately higher interest rate and lending smaller amounts. This is a balancing act that allows the risk to be shared fairly.
In contrast, a secured loan requires you place an asset you own, or equity in an asset as assurance to the lender that in the event you default, they can recoup their loss by selling that asset. For example, if you own he freehold of your store or a residential property, you can use that to minimise the risk of a loss for the lender.
By using that asset you reduce the risk for the lender and they are able to charge a lower interest rate. In general, it also means you can borrow larger amounts of money.
Once you find a great lender, like Capify
, and choose the right sort of loan, you can get on with growing your business, improving your store and betting ready for the next big sales push.
Capify was born out of the desire to offer small businesses an alternative and accessible lending option. Proudly we were the first to do so in Australia. With 10+ years of local experience providing small business loans working capital globally, Capify is Australia’s most experienced alternative lender to small business.
With a focus on customer service and simplicity; our vision is to support Australian businesses with tailored financial solutions and solve small business finance. With our philosophy, we work together to create the most flexible and accessible commercial business loans for our clients. This allows us to streamline our internal processes passing on time and cost savings to you.
Capify is Australia’s Leading unsecured small business lender, and you can easily find us on Finder.com.au, Canstar, Mozo, InfoChoice, and other financial comparison websites.
We have business-friendly staff
We ensure our team have a comprehensive knowledge of the Australian SME market and can truly understand your business needs, aspirations and need for finance. Our small business lending consultants will guide you through the entire small business loan process from initial quotation to funding.
Mozo says “With more than ten years of experience, Capify has been helping Australia’s small business owners reach new heights with their tailored funding solutions. The lender provides unsecured business loans which are flexible and accessible, and its simple application process makes getting funding a breeze”.