As a retail store owner, you know the frustration of finding the right financing for your business needs. With the staggering variety of business financing choices, it’s important to know which ones are the best fit by acquiring a basic understanding of the top four retail financing options available: retail store inventory financing, cash advances for retail businesses, equipment leasing and financing and franchise loans.

Retail Store Inventory Financing

Without inventory, you have no way of generating income, but without income, you have no way of purchasing inventory. It sounds like a catch-22 situation; however, it doesn’t have to be one. Many retail business owners turn to revolving lines of credit to ensure their inventory needs. Revolving credit lines consist of lenders or suppliers providing a set amount of continuously available credit for an indeterminate time period. The credit is repaid periodically and the credit line is renewable after each repayment. The amount of credit assigned depends on your credit, revenue and cash flow.

Cash Advances for Retail Businesses

Another of the top four retail financing options is the cash advance. For businesses that do not qualify for small business lines of credit, this type of short-term loan is a good option. They are particularly beneficial when larger amounts of inventory are needed during times of increased customer traffic. Business and merchant cash advances come in two forms: Merchant cash advances and daily ACH loans. Merchant cash advances are based on a percentage of monthly credit card sales, while daily ACH loans are based on total sales. Payback amounts vary based on borrower risk.

Equipment Leasing and Financing

For many small businesses, the cost of operating equipment can be overwhelming; however, equipment financing offers several advantages that will help keep your business operating smoothly. For example, 3-5 year terms allow for affordable payment options, it’s easier to qualify for than unsecured loans and there is the potential for large tax advantages.

Retail Store Franchise Loans

If your retail store is a proven franchise concept, you may be able to access proprietary loan programs. Because franchise businesses are considered lower risk, better loan rates and terms are available, often in the form of specialized programs, for owners of these types of retail stores. Franchise financing also assists proprietors in obtaining SBA loans should the franchise itself not provide special financing options.

Knowing your retail finance needs and understanding the top four retail financing options, helps ensure your retail store a success.