Retail business financing: options, costs and how to qualify
Retailers usually fund seasonal inventory with a line of credit, fixtures and systems with equipment financing, and new stores with term or SBA loans; cash advances are fast but cost the most.
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Retail cash flow follows the calendar. You buy inventory months before the season that sells it, then hold cash through the slow stretch after. Funding that you can draw and repay with the season usually costs less than a lump sum you pay back every business day.
A worked example for retail
Inventory before the holidays: $25,000 over 6 months
Merchant cash advance at a 1.35 factor rate$8,750 in cost
Bank loan at 10.98% APR, for owners who qualify$807 in cost
Example numbers, not an offer. The loan assumes equal monthly payments. Rates you are offered depend on your business. Price your own offers
What you need the money for, and what fits
- Holiday or seasonal inventoryDraw before the season, repay as it sells.Best fit: Line of credit
- Fixtures, POS and systemsThe equipment secures the financing.Best fit: Equipment financing
- A new store or remodelA larger amount over a longer term. SBA 7(a) loans go up to $5 million.Best fit: SBA loan
- A small first stepSBA microloans go up to $50,000; SBA says the average is about $13,000.Best fit: SBA microloan
- A one-time bulk buyA lump sum with a fixed payment.Best fit: Term loan
- Cash in days, steady card salesFast, but costly. Check the total payback and reconciliation terms.Best fit: Merchant cash advance
Your card processing costs, too
Debit cards matter for retail costs. Under Regulation II, a debit card issuer with $10 billion or more in assets may receive no more than 21 cents plus 0.05% of the sale in interchange, plus 1 cent for fraud prevention. On pricing that passes interchange through, that cap shows up in your costs. On a flat rate, it does not.
See interchange-plus vs flat rate for a worked example.
What to watch for
Debits after the season. A cash advance taken for holiday stock keeps debiting in January. Size it against your slowest month, not your best.
Surcharges. Visa does not allow surcharges on debit or prepaid cards, and several states limit credit card surcharges. Check the surcharge law table.
Four steps to funding
- 1
Answer a few questions
What you need, how much and how soon. Your industry is already filled in. No contact details to see options.
- 2
See your best-fit options
Two to four products that match, with typical cost ranges in dollars.
- 3
Get offers, if you want
Your request goes only to our own funding service, never to a call list.
- 4
Read the agreement, then decide
The funder is named in your agreement. Sign only if the numbers work.
Frequently asked questions
Sources
- SBA, 7(a) loans (maximum $5 million), accessed Oct 20, 2026
- SBA, 504 loans (maximum $5.5 million), accessed Oct 20, 2026
- SBA, Microloans (up to $50,000), accessed Oct 20, 2026
- 12 CFR 235.3, Regulation II debit interchange cap (eCFR), accessed Oct 20, 2026
- Visa, Surcharging credit cards: Q&A for merchants, accessed Oct 20, 2026