Business Financing for Retail Stores in Canada

With Canada’s unique mix of cultures, history and modern innovation. It’s easy to see why the retail industry is booming. From province to province we can spot little shops in small local communities and huge malls that offer some of the best shopping experiences in North America.

Running a retail store as a small business is a dream come true for a dedicated business owner. But as with any business, it can come with its own set of challenges. Competition, inventory, seasonality and even the weather are just some of the factors that determine the success level of a retail store in Canada. A savvy retail store owner knows that staying ahead of the curve is critical to thrive in today’s market.

Access to financing, if used correctly, can be a phenomenal tool for a retail store owner. A thought-out infusion of capital can put in place a system that will not only pay for the investment quickly but continue to generate long-term revenue that otherwise could be completely missed. Perhaps you’ve already given some thought to how you would invest some extra capital – if you had access to it – or maybe you haven’t gotten to that point yet. In either case, if you are a retail business owner, there are a few things you need to know about funding your shop.

  1. Obtaining Retail Store Financing Today is Easier Than Ever Before

If you’ve tried applying for business funding at a Bank in the past, you know how difficult it typically is to get your loan application approved. A small retail store that hasn’t been around for many years and doesn’t generate enough revenues is considered “too risky” for the highly cautious banking system in Canada. However, with more online business lenders available in the market, many small business owners are now able to get approved for a loan fast and easy, all from the comfort of their home or office. At OnDeck, for example, you can apply online in a matter of minutes to find business financing options. In fact, we’ve helped tens of thousands of small business owners in North America to date!

  1. Not All Business Loans Are Good for You

Sometimes, it’s easy to get caught up in the excitement of getting capital for your business. But it’s imperative to go into the process with a clear head and a plan of action on how you will use any potential business loan if approved. For example, borrowing money to pay off overdue bills and salaries may not be a good investment as you are just using a loan to cover up holes and stay above water. Once the bills are paid with a loan, the loan itself becomes hard to pay off, and the added interest can result in more long-term pain – potentially hurting your business.

However, if you are considering expanding your space to create room for something like extra hot-selling inventory, or some other ROI generating opportunity, this will directly impact your revenue and profit. The amount of extra revenue can pay for the loan and in time, the profits can far outweigh the initial investment and interest on the loan – creating a positive ROI for the loan. Just remember to think through your decision very carefully and have a clear game plan on how you will use the borrowed capital.

  1. Consider the Different Loan Types

Depending on your situation, there are different business financing products which may suit some businesses better than others.

For example, a typical term loan means that you will have a predetermined periodic payment schedule with a predictable payment. Another form of business funding is a merchant cash advance, where you pay back a percentage of your daily debit and credit card sales A Merchant Cash Advance can be very expensive. A business line of credit, on the other hand, gives you access to capital as you need it, and you only pay interest on the amount that you take out from your available credit.

It is important to know your options. Feel free to give us a call any time, so we can learn more about your business needs and present you with all your available business funding options.