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Types of Retail Business Loans

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Types of Retail Business Loans

The retail industry in Canada us vibrant and diverse. The diversity in the retail sector is also reflected in the diversity of the retail business loan segment. There are numerous types of retail loans with each type designed to meet a specific purpose in the retail industry.

The following are types of retail store loans available to borrowers:

Retail Working Capital

Each retail store has its own unique working capital needs such as inventory purchases, payroll, and daily operational expenses. There are retail working capital loans for all these needs.
Retail working capital loans are usually a good way for retail stores to survive through a slow season. The loan will help you finance your retail business any time of the year and will come in handy when cash flows are inconsistent.

Merchant Cash Advance

Merchant cash advances are specifically channeled to businesses that process daily payments using credit and debit cards. These loans can be good for retail shops that take payments from credit cards and since they allow flexible payments. The retail business can pay back more when they sell more and pay less when sales drop. Simply put, the loan allows the business to take an advance against future sales.

Retail Term Loans

The simple retail term loans are the most readily available type of retail business financing. Retail term loans can be used for any business purpose since you receive a load of cash which is then repaid as per the terms agreed to with the lender.

Retail Lines of Credit

Retail lines of credit offer retail shops a very flexible financing option that can be utilized to pay for short-term or long-term expenses.

You have to get approved for the retail line of credit before drawing funds as the agreed to terms with the lender. The repayment of the loan facility will be according to the agreement with the lender. Normally, retail businesses will pay very little to get to open a line of credit which helps the business with an excellent backup option.

Retail Equipment Loans

Retail equipment loans are ideal for a retail business that need to purchase large and costly equipment. The loan can only be used for the sole purpose of equipment purchase. The equipment bought using the retail equipment loans acts as collateral which makes the loan better and safer than term loans. For comparison to term loans, take time to compares the applicable rates and repayment terms.

Canada Small Business Financing Program Loans

The setting up of the Canada Small Business Financing Program was meant to make it easy for businesses to access financing. The government program shares the risk of loans with lenders which makes them cheaper and accessible.
The Canada small business financing program loans are meant for startups and businesses with less than $10 million in gross annual revenues. Find a lender who participates in the program to apply for a loan that offers you favorable rates.