Best Convenience Store Loans Explained
Here we will go into greater detail about each of the convenience store loans summarized above.
Small Business Administration (SBA) loans provide you with fast access to government-guaranteed funds. You will need to work via an approved lender - as the government does not deal directly with business owners. However there is a high chance that you will receive financing if you have a solid business plan.
Since the government is fond of financing property developments with a high-income stream, convenience stores are the ideal ventures for SBA loans. You’ll receive the capital you need to get started and you will have a long repayment period. Also, interest rates are generally low for this loan type.
SmartBiz understands what it’s like to be rejected by the banks for loans. Fortunately, it’s an approved SBA loan provider for new companies. It’ll also assess your business needs and suggest the best solution for the years ahead.
Short to medium-term loans are another avenue you can explore for your capital funding needs. Generally, however, we recommend you apply for a short- to medium-term loan only after you’ve been in business for a few years. The primary reason being that you need a track record with historical proof of sales to qualify. The repayment period depends on how much you want to borrow and how soon you expect to be able to pay back your loan.
Term loans are an excellent solution if you want to upgrade or renovate your convenience store. If you have purchased your convenience store business from someone, you can use its former sales figures to forecast your predicted expenses and sales. What’s more, you may need less capital, as you won’t be starting from scratch. You can also alter the store to suit your brand and requirements.
We feel that BlueVine is a great choice for term loans when it comes to convenience stores. BlueVine will let you know which repayment periods are best, based on the data you provide.
Whether you develop land or purchase an existing structure, you’ll need equipment to run your daily operations. Equipment financing can help you acquire the furniture, assets, and fittings you need, so that you can provide your services to the community. What’s more, you can get funds for up to the entire value of the proposed machinery and equipment.
Convenience stores may come equipped with furnishings, but they may be outdated or dilapidated. It’s always best to start with new equipment when you open the doors to your first customers. You may also want to invest in the latest technology to make sales go faster, such as digital payments.
Fundera is known for its exceptional startup loans for equipment. It also offers SBA loans that function as equipment financing, lowering the interest rates and extending the repayment periods. Even if you don’t have a good track record, this lender is willing to work with new companies on their projects.
You don’t want to have to use your capital or operating funds to buy new inventory items daily or fund repairs. A business line of credit is available for you to draw on at any time, and you’ll only pay for what you use. There’s a limit to how much money is available, but the interest only applies to the amount you withdraw.
You’ll likely be buying new merchandise often to replenish stock, for your convenience store. Machinery also breaks down due to constant wear and tear, or technology may fail unexpectedly due to software issues. A business line of credit is the perfect solution for covering these costs until your profit comes in.
OnDeck excels with the business line of credit offers for convenience store loans. It’s more lenient when it comes to approving finance, and you might receive a discounted rate for early payments. Many clients also praise it for its exceptional customer support.
A merchant cash advance is available for industries that accept bank card payments. If your application for a merchant cash advance is successful you will receive a lump sum amount and the lender will take a small percentage of your sales. The lender will take a weekly or monthly repayment with a low interest rate.
As a convenience store owner you will likely be dealing with clients to buy products with credit and debit cards daily. In this way, a merchant cash advance is perfect for your business. Lenders generally have a minimum sales limit which they require for the repayment. You will need to cover the difference at the end of the month. However, convenience stores usually have no issue meeting this cap.
Square Capital offers its members a merchant cash advance solution, and it’ll provide you with the technology to accept card payments. If you’re not a member yet, you can register your new business with them to get started. The lender will then advise how much you will qualify for.
Whether opening or expanding a convenience store, good cash flow can make or break the success of such a business. Taking out traditional loans usually requires a lot of prerequisites that must be met, and the repayment terms can oftentimes be very strict.
Fortunately, Fora Financial — a lender that comes highly recommended — gives small businesses the opportunity to obtain finances necessary for growth with little fuss. To qualify, the company must be operational for at least six months and generate at least $12,000 in gross sales a month. Other than that, Fora Financial is much more forgiving and flexible.
With a short-term loan, a convenience store can add more stock to their shop, hire more staff and take care of many other miscellaneous expenses that can pop up in the day-to-day running of the business.