The Benefits of A Small Business Loan For Retail Businesses

For many business owners, running a retail small business is a dream come true. But just like any other business, it does come with its fair share of challenges. Some of these challenges include managing inventory, low seasonal sales, competitors, and the Canadian weather. In order to grow in today’s market, you have to stay a few steps ahead of the curve. One way is to obtain a loan for your retail business.

Whether or not you have thought about getting some extra capital for your small retail business, there are a few things you need to know beforehand. In this post, we’ll explain why you need a small business loan for your retail business and what the best options are for you.

What is a small business loan?

A small business loan is a sum of capital that you borrow from a bank, or other lenders, in order to finance costs related to your business. Then you start repaying the loan over a fixed period of time. These loans can have either fixed or variable interest rates, as well as different types of fees like prepayment or origination fees.

Keep in mind that there are many types of small business loans out there. It’s best to estimate how much you need, do your research, speak to advisors, then simply fill out this application form to find out if you qualify for a small business loan.

Why retail businesses need a small business loan?

Here are some of the most common reasons that retail business owners obtain a small business loan:


This is the most important part of any retail business because it is your most significant current asset. It is the lifeblood of your business (besides cash flow). During peak seasons, you need to stock up and purchase bulk items from a vendor. In other words, you need to have the right type of inventory, and make sure you’re on top of managing and controlling it. You wouldn’t want to run out of stock! There are many inventory management tools that you can purchase and use to keep track of your cost and stock. Software such as Get Sweet, Voodoo Robotics & Clear Spider help you keep inventory information up-to-date and make decisions on whether or not you need to lower your inventory cost.

Also, obtaining a short-term business loan is the best option if your business experiences inventory turnover a few times a year. You can use the loan to purchase the products you need and sell quickly.

Payroll & Hiring

Employees are the most vital part of the retail business industry; more than any other industry. They provide exceptional customer service to generate more sales. Without it, your business would crash quickly. That’s why the costs associated with hiring and retaining quality talent are very important. In many cases, especially if you are just getting your retail business off the ground, you’ll find yourself constantly hiring and training new staff, which is both time-consuming and costly. There might come a time where you need to hire someone quickly, but don’t have the cash flow to make it happen. In this case, obtaining an unsecured small business loan can be a great source of capital for this purpose. It is also much more flexible than a small business line of credit.


Based on the type of retail business you operate, you might need equipment to run it. For instance, if you have an auto retail shop, you need auto parts, or if you have a clothing retail store, you need clothes and other types of accessories. But no matter the type of retail business, you should start investing in more technologically advanced equipment. For example, a more sophisticated security system to mitigate product theft. You can also use the small business loan to stock the employee break room with comfortable chairs and a new coffee machine, further improving employee morale. When you think about it, there are several ways to use a small business loan to purchase equipment that improves your retail business.


In the last two decades, society has taken great strides towards using technology to improve daily life, with retail businesses benefiting as well. As a retail business owner, you should obtain a business loan for the following:

  • Advanced Point of Sale system – Many POS systems today not only ring up customers but also track inventory and provide you with notifications if a popular item is out of stock and needs to be reordered. They are available in tablet format (on an Apple or Android device), which allows cashiers to be mobile when there is a long line up. Not only does it provide ease of purchase for customers, but also enhances their shopping experience.
  • Credit & debit card systems – Not many people carry cash these days; it’s all about debit and credit cards. Many customers are switching their credit and debit cards to chip cards. That’s why it’s wise to implement a processing system that accepts card chips. It will improve the convenience customers’ experience when shopping at your small business, which increases the likelihood they will come back to purchase more of your products. These credit card processing systems can be quite pricey, so it’s best to consider obtaining a small business loan to help cover those costs.
  • E-commerce & online presence – Many customers prefer online shopping nowadays, so it’s wise to create an easy to access online website, in addition to your brick and mortar retail store location. Furthermore, consider creating a retail mobile app and investing in social media marketing. This way you can reach a larger group of customers while making each one of them feel a connection to your brand and retail business storefront.

Consider different loan types for your retail business

There are many different small business loan options out there based on your business’s needs and situation. If you choose a typical term loan, it means that you will have a predetermined payment schedule and a set payment amount. If you choose a Merchant Cash Advance, you repay in the form of a percentage of your daily debit and credit sales, which can end up being quite costly for you, hampering your business’s ability to grow. But no matter which option you decide to choose, you can always give us a call or email us so we can learn more about your business needs and provide you with the best small business loan option.

Want to know if you qualify for a small business loan? Check your eligibility here!