What are the Best Types of Business Loans for Clothing Stores & Boutiques?
Canada Business Financing Program Loans
Loans backed by the Canada Small Business Financing Program (CSBFP) come with better rates. Because the program sees the CSBFP share the risk of loans with select lenders, these lenders can offer you better rates. You can find these loans from reputable lenders who work with the CSBFP.
Revolving Lines of Credit
A business revolving line of credit has many applications for a clothing store. You can use your pool of credit to finance any purchase you need to. A revolving line of credit ultimately gives a clothing store the financial freedom it needs to not struggle to make any particular purchase.
Term Loans
A term loan is the most generic option among clothing store loans. You can use a business term loan to purchase anything your business needs.
Merchant Cash Advance
If your clothing business gets many sales with credit cards, an MCA is a possible option. An MCA isn’t like any of the traditional business loan options. Instead of a lump sum with a repayment term, an MCA is just an advance that you pay back through portions of future credit card sales.
What are the main purposes for Clothing Stores & Boutiques Business Loans?
Stocking Up
If you’re low on stock but would rather not make a large payment with your available cash, you can get a loan. Clothing store loans are often used to restock inventory.
Renovations
Renovating a retail clothing store will cost a lot. However, renovations often pay themselves off through the enhanced customer satisfaction they provide. This makes renovations one of the more common reasons to get a clothing store loan.
Expanding or Opening a New Location
When your clothing store is doing well, there is often nothing to do but grow. Clothing store loans are often used to expand a clothing store business. This is a reason to get a loan that can pay itself off safely with increased foot traffic and sales.
Marketing and Promotion
Clothing stores and boutiques live off of the publicity they get. If you need to spread the word about your business, you can always take out a clothing store loan to build publicity.
How Do You Apply For a Small Business Loan for a Clothing Store?
If you need a business loan for your clothing store, you should start by looking for the business lenders that can serve you. Different lenders offer different:
· Speeds
· Interest rates
· Funding totals
· Minimum borrowing requirements
When you find the best lender that you qualify for, you will have to send an application. The lender will review your credit score and your business financial information. They will then use this assessment to come up with the terms of their offer.
When the lender sends you an offer, you can then choose to accept it with a full application. Once you accept, the money should be transferred to you quickly and the terms of the loan will be active.
Frequently Asked Questions about Loans for Clothing Stores
How long does it take to get a loan for a clothing store?
The wait times for any business loan will depend on the lender you go to. A typical bank will take at least 10 business days to assess your loan. An alternative lender may approve your application in one day, but many will take longer (3 to 4 days).
Can I get a business loan for a clothing store with bad credit?
Yes, you can almost always get a business loan. If you have a low credit score, your choices will be more limited. You will also be offered worse rates and smaller loans by the lenders you go to. However, bad credit lenders aren’t in a rush to turn businesses down over bad credit.
How big of a business loan can I get for a clothing store?
The size of a clothing store loan you can get will depend on your lender and your financial information. Lenders will trust you with larger loans if your credit score and clothing store’s profit margins are higher. Typically, a clothing store business loan is $30,000 – $100,000.
