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Making Unsecured Business Loans Work for Retail Companies

unsecured business loan retail.jpgCash shortages affect businesses in every industry—including retail. Believe it or not, but 28% of small business owners lose sleep at night worrying about how they will be able to bridge cash gaps and continue growing their companies. In fact, cash flow problems are the reason why 29% of new businesses fail, according to a recent study.

Cash flow problems impact retailers for a number of reasons. Sales can dip unexpectedly, causing companies to fall short of their revenue projections. Money can get tied up in excess inventory. And a new competitor can open a shop nearby, siphoning away some customers.

Whatever the case, when cash flow problems materialize, running a small business becomes that much more difficult. When funds are tight, not only is it impossible to invest in things like marketing or opening an additional location, covering recurring expenses can get tricky as well.

Instead of crossing their fingers and hoping that cash flow problems will resolve themselves, forward-thinking retail business owners proactively look for solutions to improve their financial situations. Some of them might decide to raise their prices. Others might try to do everything they can to reduce their expenses. Others might teach their employees the arts of upselling and cross-selling.

While such approaches can alleviate some of the symptoms, they likely won’t cure cash flow problems in their entirety. For this reason, many retail business owners look to outside sources of financing when they need more cash to grow their businesses.

Whether they’re attempting to solve cash flow problems or are seeking more money to invest in their companies, many retail owners opt to take out small business loans. As they do their research to find the best lender, many business owners realize very quickly that it’s quite difficult to get a loan from a traditional banking institution. That’s because in the aftermath of the most recent financial collapse, many banks lost money as lots of their small business customers were forced into bankruptcy.

Though banks may hesitate to lend money, retailers are likely to find the funds they need to expand their operations in the form of unsecured business loans issued by non-bank lenders.

Unlike traditional banking loans that typically require borrowers to put up collateral in order to obtain financing, unsecured business loans carry no such obligations. What’s more, retailers can apply for an unsecured business loan in as little as 15 minutes. Once approved, money can be deposited in their company’s bank account within 24 hours—meaning business owners can invest loans right away.

With money from an unsecured business loan on hand, retailers can:

  • Hire additional employees to better serve their customers
  • Remodel storefronts to attract new customers
  • Launch marketing campaigns to increase brand awareness
  • Buy new business infrastructure (e.g., computers and tablets) to increase efficiency
  • Acquire additional inventory to boost revenue

Whereas secured loans issued by banks are intended to be put to use in specific ways, retail owners have much more flexibility with unsecured business loans. Generally speaking, the money can be invested however a business owner sees fit.

Due to the ease with which these financial instruments are approved for many retailers—and the fact that borrowers don’t have to put up any collateral to secure funding—unsecured business loans often have interest rates that are slightly higher than loans issued by banks. You’ll know exactly how much you’re expected to repay up front when you partner with a transparent lender.

Cash flow issues are one of the most common problems affecting small business owners. So don’t feel discouraged if you need to reach out to a non-bank lender for financial assistance. To learn more about how your retail business can obtain an unsecured business loan—even if you have bad credit—check this out.