Successfully Funding Thousands Of UK Limited Companies Since 1989
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Retail makes a significant contribution to economic growth in the UK and is a key employer. From discounter supermarkets to luxury shopping experiences the potential for continued growth is clear, but businesses need to act on changing consumer behaviour and expectations.
One hugely disrupting factor was Covid-19, which resulted in the mass closure of retail outlets. Although the growth of online shopping has changed the sector, it cannot always compete with the in-person ‘retail experience’ that some consumers enjoy.
Access to flexible forms of funding is essential to keep up with changes in any sector, and retail is no different. Whether it is a retail outlet, an e-commerce store, or an out-of-town shopping mall, retail businesses can benefit from a range of finance options that address their changing needs.
Changing consumer expectations
To keep up with new consumer behaviour and expectations businesses need to invest in technology that provides reliable data. The instant feedback from shoppers on social channels means retail sector businesses are also exposed to loss of trade if they do not engage and interact online.
The rise in business rates and employment costs, including the National Living Wage, high-cost inflexible leases, and ever-increasing energy expenditures, all negatively affect working capital availability. Coupled with lower consumer spending due to the cost of living crisis, this may put a brake on growth plans.
Net zero carbon retail
Achieving a net zero carbon retail sector requires urgent action as customers demand sustainably-made plastic-free products and renewable or recyclable goods. Worker pay and conditions are also key concerns as ‘fast fashion’ threatens the success of the environmental initiative.
Retail businesses need access to funding for a range of reasons, including but not limited to recruitment, marketing, cash flow, and general business expansion.
A revolving credit facility is similar to a bank overdraft. Its flexibility offers retail businesses a little ‘breathing space’ concerning working capital usage - the facility can be used, repaid, and then used again for the duration of the arrangement.
Merchant cash advances
Merchant cash advances provide a reliable source of working capital, and crucially, repayments are based on the business’s future credit card sales. This means that if trade is slow and credit card receipts are lower than expected, repayments are also lower. When compared with the fixed repayments required by other types of funding, this flexibility can be extremely helpful in the retail environment.
This type of funding can be suitable for online retailers as well as brick-and-mortar businesses. The cost of an asset, such as a vital piece of equipment, can be spread over the duration of a hire purchase agreement, with the business taking ownership at the end.
Alternatively, leasing may be preferable for businesses to gain access to hard assets when they do not require ownership. In this case, the asset may be upgraded onto a new lease arrangement, the original lease continued, or the asset handed back if it is no longer needed.
We can help you secure vital finance for your retail business as we are commercial finance brokers, rather than lenders, and know the criteria of all the UK lenders. Furthermore, we do not charge you for our services, nor ask you to sign an exclusive contract to use them.
Please contact one of the team to find out more about how we can help.
How we help other Sectors
We work across a wide range of sectors throughout the UK, providing specialist advice to each sector.
Can I use property as security for a business loan?
Secured business loans require one or more assets to be put forward as collateral. This protects the lender from financial loss if a company cannot afford to keep up with the repayments at any stage.
Does my company have a credit score and how can I improve it?
Limited companies do have credit scores and they’re used for a similar purpose as individual credit ratings. Lenders use them as a guide to creditworthiness, but a business credit score is also useful for suppliers and investors to gain insight into your company’s financial situation.
What is bad debt and how can I protect my company?
Bad debt presents an insidious threat to the financial stability of your business. It places strain on your working capital and creates uncertainty in paying your bills, but this can be addressed successfully if you take proactive steps to protect your company.
What is the difference between open and closed bridging loans?
Bridging loans are short-term forms of secured finance that literally ‘bridge’ a gap between funds going out of a business and monies coming in.