You know how hectic the holiday season can get if you are a retail business—people shopping for deals, activity online going through the roof. Especially if you’re a product-based business, the holiday season is likely one of your busiest, if not the most active, times of the year. Many small business owners need to hire more people during this critical sales period. During the holiday season, purchasing inventory in bulk is also a popular business strategy.
The key is to ensure you have enough money to handle the needs of this time of year and still manage your day-to-day expenses. In other words, you must be able to keep pace with the busyness of this season and still have operations run smoothly. Applying for commercial financing can be a lifesaver in some instances. This article breaks down some of the things that small business owners can do with a retail business loan during the holiday season.
Getting a Retail Business Loan for Your Company
Preparation is key to enhancing your odds of qualifying for a business loan. In other words, have all relevant documents in order. Make sure your financials are up to date. And check your credit score and ensure that that is up to date.
Items you will likely have to provide when applying for a retail business loan are tax returns, financial statements to include balance sheets, income statements, cash flow statements, articles of incorporation (if applicable), leases and licenses, and other documents. The sooner you can provide these things, the faster the process.
With retail business loans, depending on the lender you work with and the type of loan—be it a line of credit or merchant cash advance—some customers get the funds in their accounting as little as two days. And when we’re talking about a chaotic holiday season, getting cash quickly is critical.
Most businesses often utilize retail business loans for the following:
1) Hiring on seasonal employees
Many entrepreneurs endure not having enough people to cover all of the work needed for this time of the year. And especially this season, when labor shortages are plaguing many business owners, having enough money to get people on board will be extremely important. By taking out a loan, you give yourself a cushion. This cushion enables you to hire more people to keep up with the uptick in holiday sales without having to worry about exhausting your reserves.
2) Purchase seasonal inventory
Depending on the nature of your small business, you may need to acquire additional inventory for a special holiday promotion or simply because you need to stock more of certain items as people tend to buy more of that product around this time of year. Having additional cash on hand to go out and comfortably purchase the inventory you need could make a massive difference in your bottom line. The increased sales can offset any costs associated with the loan and, in the end, you turn a decent profit.
3) Launch a marketing campaign
Usually, businesses will have a sale or special promotion during this time of year. The key to the success of any such store promotion is to ensure that people know about it. How do you accomplish this? By strategic marketing. Therefore, you could use a retail business loan to launch a dynamic new marketing initiative geared toward attracting new customers. You might hire a marketing expert to help in your endeavor. Purchase ads in strategic places. Get creative with your marketing budget and watch those sales skyrocket.
4) Purchase new tech
When it comes to busier times of the year, you might want to think about upgrading your software and IT systems so that they can handle the heavier load. Whether it’s investing in your eCommerce presence or ensuring that your in-store systems can take the strain of more purchases, putting money toward technology not only helps during the holiday season but can also help the business in general throughout the year.
5) Start a rewards program
Rewards programs seem to be all the rage for retail businesses. New apps and platforms available to help you with this type of program are more accessible than ever to implement. Getting cash to begin this program can be a massive boon to your business. As more and more customers purchase from you during the busy time of year, a rewards program can help foster more excellent customer retention.
First Union Lending is Here for You
We help small businesses thrive and grow—it’s why we do what we do. Our loan programs are fast and flexible, and many of them are in fact designed for retail businesses. Call today to see how we can help you!