Retail Business Loans in 2025 - Nav
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Retail Business Loans

A retail business loan gives you the cash you need to pay for inventory, overhead, or payroll for your retail business. When you have vendors who want to get paid but you won’t sell your stock for a while, this can be the much-needed support to help you effectively manage your cash flow.

Retail business loans

Get to know retail business loans

Retail business loan details

Loan Amounts

$25,000 – $1 million

Interest rates

4 – 30+% APR

repayment terms

3 – 25 years

turnaround time

2 weeks - 6 months

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Pros

  • Competitive interest rates available
  • Predictable monthly payments
  • May help build credit
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Cons

  • May require collateral
  • May require high credit scores
  • Interest rates vary depending on qualifications

The Business Financing Landscape of Retail Loans in 2025

Running a retail business — whether an ecommerce business or retail store (or perhaps both) — has many costs, from the inventory that you’ll turn around to sell to your marketing, payroll, and technology costs. Because there’s usually a gap between when you buy inventory to sell and when it is actually sold, you can come up short on cash flow for a few weeks or even months.

You need cash flow to stay competitive, otherwise, your customers will go elsewhere to shop.

As a small business owner, it’s up to you to determine the best business financing options to keep your company afloat while revenue is unsteady, and a retail business loan could be the solution you seek.

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What is a Retail Business Loan?

A retail loan can be used for a variety of expenses in your retail business, including to:

  • Purchase inventory
  • Pay employees
  • Invest in marketing to grow your business
  • Buy technology to make your business more streamlined

Essentially, you can use this loan for any expenses incurred in running a retail store or retail business. There are typically no restrictions on what it can be used for.

How Financing Can Help Your Retail Business

Before you fill out a loan application for a retail loan, know both sides of the situation. While there are many benefits to this type of financing, there are a few drawbacks to be aware of.

Retail Business Loans Pros

In addition to getting access to the working capital you need, there are many reasons to consider applying for small business loans for your retail business.

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Pros

  • Competitive interest rates available
  • Predictable monthly payments
  • May help build credit

Competitive Interest Rates

Interest rates vary, depending on a variety of factors including whether or not you pledge collateral. But you may be able to qualify for a lower interest rate than you can with other financing options like business credit cards or a merchant cash advance. 

Predictable Monthly Payments

No one likes variable expenses because they’re hard to plan for. Some types of retail business loans provide fixed monthly payments so you’ll know exactly what you owe each month, which helps you budget for your business. 

Great for Building Credit

If your credit history is scant or your personal credit scores or business credit scores are low, a retail business loan may help you build credit if the lender reports your payments to the business credit bureaus.  Strong business credit can help your business qualify for increasingly better financing terms in the future.

Retail Business Loans Cons

Smart business owners look at both sides of a financing option to truly understand whether it’s right for them. Here are some less positive aspects to be aware of.

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Cons

  • May require collateral
  • May require high credit scores
  • Interest rates vary depending on qualifications

May Require Collateral

Depending on your credit history and scores, as well as other qualifying factors, the lender may require you to pledge collateral against the loan. Inventory would be a typical type of collateral for a retail loan, but it could also be equipment, accounts receivables, or even home equity in the case of some SBA loans. 

May Require High Credit Scores

Some loans want higher credit scores than others. Sometimes higher credit scores are required, and other times they result in a lower interest rate. Be aware that if your credit scores aren’t stellar, you may not qualify for the best products.

Interest Rates Vary

If you don’t have high credit scores, you may pay more for your loan. You’ll have to decide: do you need an injection of cash badly enough to pay a premium for it? Shop around to ensure you’re getting the best rate with your credit situation.

How Does a Retail Business Loan Work?

If you’re robbing Peter to pay Paul in your retail business, you can appreciate the importance of stabilizing cash flow. That’s essentially what a retail business loan does. Once approved for a specific amount, that loan or funding is deposited into your business bank account. You use what you need and start paying back the loan or financing according to the terms. A term loan will offer in consistent monthly payments installments that include the interest you pay on the loan while other types of financing such as a business cash advance will be paid back from a percentage or fixed amount of future sales.

How to Qualify for a Retail Business Loan

There are several factors that go into how you qualify for a retail business loan or financing, and each lender is different in terms of the qualifications they require.

Both your personal and business credit scores may be a factor. The higher your scores, the better interest rate and terms you may qualify for.

You may also be required to put up collateral, especially if your credit scores aren’t high. Generally, lenders want you to have been in business for three months or more, have average monthly revenues of $10,000 (or annual revenue of $120,000), and credit scores of at least 450.

If you want to pay the loan off early, great! Depending on the terms of the financing, you may save a little in interest, though be sure there are no penalties for early payoff.

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Best Uses for a Retail Business Loan

Here are a few scenarios where having a retail business loan or other retail financing options would come in handy.

You know your sales skyrocket in Q4 as holiday shoppers flock to buy from you. In September, you know you can save more per item if you buy larger quantities, but you lack the funds to do so. A retail business loan or advance would provide you the funds you need to buy more and save, and then you can quickly pay that loan off once you’ve raked in money over the holiday shopping season.

Here’s another one: your business is doing so well, you decide to open a second location. That means hiring more staff, paying commercial rent, and ordering more inventory. The numbers show that you can quickly turn a profit, but you need a cash injection to get there. A loan can help.

Financing Options for Retail Businesses

As a business owner, you need to fully explore all financing options to understand which is the best for your retail business.

SBA Loans

SBA loans are offered through banks and offer some of the lowest rates and longest terms of any retail business loan option, if you qualify.

There are several SBA loan programs that may be good for retail businesses, including SBA 7(a) loans which may be used for working capital and inventory, and 504 CDC Loans that may be used for equipment and real estate.

Unless you’re applying for a disaster loan, you do not apply for these loans through the Small Business Administration. Instead you’ll need to work with a participating lender approved by the SBA. Each lender may have its own criteria to qualify so don’t be discouraged if the first lender you talk with can’t offer you a loan. 

SBA Lender: SmartBiz

SmartBiz’s online application is designed to streamline the process. Smartbiz matches you to SBA lenders that are a fit based on your qualifications. Qualified borrowers may get funded in less than a month from the time the loan application is approved. SBA loan requirements are very specific, so this can be a great way to help save time. 

Bank Loans

If you don’t qualify for an SBA loan, consider a bank loan or a business loan from a credit union. Bank loans can offer great rates, but can take longer to process than other types of financing. Approval can take weeks or even months. They also often have stringent qualifications. You’ll need good to excellent credit and most banks will require two years of business tax returns as well as recent business bank statements. A business plan may be required, especially for startups.

Line of Credit

Having access to cash when you need it is a fantastic option for many retailers. Opening a line of credit lets you take out cash when you need it, up to a fixed amount. Pay it back and you can borrow again. You’ll only pay interest on the money you’ve borrowed. Established retail businesses should have a business line of credit available when they need it.

Inventory Financing

If the money you need is specifically to purchase inventory, consider inventory financing. Your inventory purchases serve as your collateral, which reduces risk for a lender and lowers your rate.

Equipment Financing

If you’re looking to purchase a point of sale system, or furniture or fixtures for your retail store, equipment financing could be the right fit. With equipment financing, the equipment you are purchasing is your collateral for the loan.

Equipment Lender: TimePayment

Time payment offers equipment leases from $500 to $100,000. Their multi-level credit scoring model allows them to approve a wide range of customers, including small retail businesses and new businesses. Transactions under $10,000 may be approved online within minutes and larger transactions within a few hours.

Equipment Lender: LendSpark

LendSpark can provide equipment financing to many retail businesses with low rates, fast approvals, and the tax advantages associated with equipment financing.

Merchant Cash Advance

If you have bad credit but are looking for an unsecured business loan, a merchant cash advance could be worth considering. This is a short-term financing loan that, rather than basing qualifications on your creditworthiness, looks at your credit card or other B2C sales. You pay back the financing  loan as with a percentage of your daily credit card transactions or other sales.

Retail Loan Examples

There are a number of reasons you may consider a retail loan for your small business. Some common examples of retail loans include:

  • Mortgages — when you buy a brick-and-mortar shop or want to expand or remodel your current business real estate. 
  • Car loans — if you need a vehicle or fleet of vehicles for your business, you may use a retail loan to purchase them. 
  • Inventory loans — These can help cover the cost of the items you want to sell, especially when you’re first starting out or expanding your product line. 
  • Equipment loans — you can use this money on any equipment your business needs to run, such as production equipment, ovens or stoves for cooking, or even computers and phones.
  • Business lines of credit — you can use this type of financing for anything your business needs, and you only pay interest on the amount borrowed. Once you pay it off you typically get the credit to use again as you need it, too.
  • Small business credit cards — this is another popular option to cover expenses for a retail business, including day-to-day operational costs, like gas for your vehicle fleet, new inventory, or equipment.

Running a retail business means ebbs and flows in your cash. Maintain consistent access to funds with a retail business loan to ensure you never miss paying a bill on time.