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Here are 7 of the best retail business loans
| Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
|---|---|---|---|---|
OnDeck - Line of credit with Fundera by NerdWallet | 5.0/5 Best for Working capital needs | $100,000 | 625 | with Fundera by NerdWallet |
Fundbox - Line of credit | 5.0/5 Best for Startups | $150,000 | 600 | Read Review |
Bank of America Business Advantage Unsecured Term Loan | 5.0/5 Best for Low interest rates | Undisclosed | 700 | Read Review |
Fora Financial - Online term loan with Fundera by NerdWallet | 4.7/5 Best for Bad credit | $1,500,000 | 570 | with Fundera by NerdWallet |
National Funding - Equipment Financing with Fundera by NerdWallet | 4.6/5 Best for Equipment financing | $150,000 | 600 | with Fundera by NerdWallet |
SBA 7(a) loan with Fundera by NerdWallet | Best for Large loan amounts | $5,000,000 | 650 | with Fundera by NerdWallet |
PayPal Working Capital Loan | Best for PayPal users | $300,000 | 300 | Read Review |
Here are 7 of the best retail business loans
Best for Working capital needs
Best for Startups
Best for Low interest rates
Best for Bad credit
Best for Equipment financing
Best for Large loan amounts
Best for PayPal users
I'M INTERESTED IN:
Our pick for
Working capital needs
OnDeck’s line of credit can provide working capital up to $100,000. This credit line can help you buy additional inventory during your busy season or cover overhead costs during a seasonal slow.
OnDeck - Line of credit
Max loan amount
$100,000
Min. credit score
625
Est. APR
35.90-84.90%
Pros
- Fast access to working capital.
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Not available in North Dakota.
- May require frequent weekly payments.
- Interest rates can be high compared with traditional lenders.
May fund quickly
OnDeck - Line of credit
Max loan amount
$100,000
Min. credit score
625
Est. APR
35.90-84.90%
OnDeck’s line of credit can provide working capital up to $100,000. This credit line can help you buy additional inventory during your busy season or cover overhead costs during a seasonal slow.
OnDeck offers a fast line of credit for small-business owners with less-than-stellar credit who need to manage cash flow or buy inventory.
Pros
- Fast access to working capital.
- Accepts borrowers with a minimum credit score of 625.
- Streamlined application process with minimal documentation required.
- Can be used to build business credit.
Cons
- Not available in North Dakota.
- May require frequent weekly payments.
- Interest rates can be high compared with traditional lenders.
Qualifications:
- Minimum credit score: 625.
- Minimum time in business: 12 months.
- Minimum annual revenue: $100,000.
- No bankruptcies in the past two years.
May fund quickly
Our pick for
Startups
Fundbox offers flexible funding for retail stores that have been in operation for at least six months.
Fundbox - Line of credit
Max loan amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
Pros
- Financing available within one business day after approval.
- Simple application with minimal documentation required.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- Weekly repayments required over a short term (maximum of 24 weeks).
May fund quickly
Fundbox - Line of credit
Max loan amount
$150,000
Min. credit score
600
Est. APR
36.00-99.00%
Fundbox offers flexible funding for retail stores that have been in operation for at least six months.
Fundbox offers a business line of credit to fill a cash flow gap, and qualifying is easier than with other lenders.
Pros
- Financing available within one business day after approval.
- Simple application with minimal documentation required.
- Low minimum credit score, time in business and annual revenue requirements.
- No prepayment penalties, account maintenance fees or inactivity fees.
Cons
- Rates are high compared with traditional banks.
- Weekly repayments required over a short term (maximum of 24 weeks).
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: 3 months.
- Minimum annual revenue: $30,000.
May fund quickly
Our pick for
Low interest rates
Bank of America’s unsecured term loan offers low interest rates and competitive repayment terms. It can be a good option for established retail businesses that want to upgrade their physical location, purchase new equipment or open a new store.
Bank of America Business Advantage Unsecured Term Loan
Max loan amount
Undisclosed
Min. credit score
700
Pros
- Bank loan with competitive interest rates.
- No collateral required.
- Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.
Cons
- Can be slow to fund.
- Prepayment fees may apply to early repayments.
- Must be an existing Bank of America customer to apply online.
- Charges an origination fee.
Bank of America Business Advantage Unsecured Term Loan
Max loan amount
Undisclosed
Min. credit score
700
Bank of America’s unsecured term loan offers low interest rates and competitive repayment terms. It can be a good option for established retail businesses that want to upgrade their physical location, purchase new equipment or open a new store.
Bank of America’s term loan offers competitive interest rates and flexible repayment terms — with no collateral required.
Pros
- Bank loan with competitive interest rates.
- No collateral required.
- Bank of America’s Preferred Rewards program can offer interest rate discounts and other perks.
Cons
- Can be slow to fund.
- Prepayment fees may apply to early repayments.
- Must be an existing Bank of America customer to apply online.
- Charges an origination fee.
Qualifications:
- Minimum credit score: 700.
- Minimum time in business: 24 months.
- Minimum annual revenue: $100,000.
Our pick for
Bad credit
Fora Financial provides funding up to $1.5 million that can be used for purchasing supplies, upgrading technology, investing in marketing or hiring sales associates. You may be able to qualify with a minimum credit score of 570 or higher.
Fora Financial - Online term loan
Max loan amount
$1,500,000
Min. credit score
570
Pros
- Cash can be available quickly.
- Get a discount for prepaying.
- No collateral required.
- Low minimum credit score requirement.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Can’t build business credit.
- Longest loan term is 18 months.
- Charges an origination fee.
Fora Financial - Online term loan
Max loan amount
$1,500,000
Min. credit score
570
Fora Financial provides funding up to $1.5 million that can be used for purchasing supplies, upgrading technology, investing in marketing or hiring sales associates. You may be able to qualify with a minimum credit score of 570 or higher.
Fora Financial can be a good fit for borrowers who may fall short of qualifying for traditional bank financing or young but established small businesses looking for speedy financing.
Pros
- Cash can be available quickly.
- Get a discount for prepaying.
- No collateral required.
- Low minimum credit score requirement.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Can’t build business credit.
- Longest loan term is 18 months.
- Charges an origination fee.
Qualifications:
- In business for at least six months.
- At least $20,000 per month in revenue.
- No open bankruptcies or dismissed bankruptcies within the past year.
Our pick for
Equipment financing
If you need to purchase equipment for your retail business, National Funding issues equipment loans up to $150,000.
National Funding - Equipment Financing
Max loan amount
$150,000
Min. credit score
600
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing: National Funding offers only short-term loans and equipment financing/leasing.
- Charges an origination fee.
National Funding - Equipment Financing
Max loan amount
$150,000
Min. credit score
600
If you need to purchase equipment for your retail business, National Funding issues equipment loans up to $150,000.
Borrowers who can't qualify for more traditional loan options might consider National Funding for fast access to capital.
Pros
- Funding in as little as 24 hours.
- Prepayment discounts available.
- Offers loans to startups and borrowers with bad credit.
- No collateral or down payment required.
Cons
- Charges a factor rate that makes it more difficult to compare costs with other lenders.
- Requires higher annual revenue than other online lenders.
- Misleading website marketing: National Funding offers only short-term loans and equipment financing/leasing.
- Charges an origination fee.
Qualifications:
- Minimum credit score: 600.
- Minimum time in business: Six months.
- Minimum annual revenue: $250,000.
Our pick for
Large loan amounts
SBA 7(a) loans can provide up to $5 million in funding. So far in fiscal year 2024, 11.3% of all 7(a) loans have been issued to businesses in the retail industry.
SBA 7(a) loan
Max loan amount
$5,000,000
Min. credit score
650
Est. APR
10.75-14.25%
Pros
- Large borrowing maximums.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Collateral is typically required.
- Longer processing times than online lenders.
Low interest rate
SBA 7(a) loan
Max loan amount
$5,000,000
Min. credit score
650
Est. APR
10.75-14.25%
SBA 7(a) loans can provide up to $5 million in funding. So far in fiscal year 2024, 11.3% of all 7(a) loans have been issued to businesses in the retail industry.
7(a) loans are issued by private lenders and backed by the SBA. They offer long repayment terms and low interest rates.
Pros
- Large borrowing maximums.
- Interest rates are capped.
- Long repayment terms available.
Cons
- Collateral is typically required.
- Longer processing times than online lenders.
Qualifications:
- For-profit U.S. business.
- Unable to access credit on reasonable terms from nongovernment sources.
- Financial qualifications determined by individual lender.
Low interest rate
Our pick for
PayPal users
If your retail business uses PayPal to process sales, you may be able to get a PayPal Working Capital loan. This funding is repaid as a percentage of your PayPal sales, with a minimum repayment every 90 days.
PayPal Working Capital Loan
Max loan amount
$300,000
Min. credit score
300
Pros
- No credit check required.
- Low minimum revenue requirements based on PayPal sales.
- Funding available within minutes after approval.
Cons
- Automatic daily repayments deducted as a percentage of your PayPal sales.
- Minimum payment of 5% or 10% of your total loan amount every 90 days.
- Fixed fee structure can make it difficult to compare costs to other loans.
PayPal Working Capital Loan
Max loan amount
$300,000
Min. credit score
300
If your retail business uses PayPal to process sales, you may be able to get a PayPal Working Capital loan. This funding is repaid as a percentage of your PayPal sales, with a minimum repayment every 90 days.
The PayPal Working Capital loan can help low-revenue business owners (with a PayPal account) access fast financing.
Pros
- No credit check required.
- Low minimum revenue requirements based on PayPal sales.
- Funding available within minutes after approval.
Cons
- Automatic daily repayments deducted as a percentage of your PayPal sales.
- Minimum payment of 5% or 10% of your total loan amount every 90 days.
- Fixed fee structure can make it difficult to compare costs to other loans.
Qualifications:
- Hold a PayPal Premier or PayPal Business account for at least 90 days.
- Minimum $15,000 in PayPal sales in the past year ($20,000 for Premier).
- No outstanding PayPal Working Capital Loan.
- No minimum credit score requirement. PayPal doesn’t perform a credit check because the loan is based on your PayPal account history.
What is a retail business loan?
A retail business loan is a type of financing that’s used to manage or grow your retail business. These loans can be used to:
- Purchase inventory or equipment.
- Make payroll.
- Hire new employees.
- Pay for utilities and other day-to-day expenses.
- Launch marketing or advertising campaigns.
- Upgrade your technology.
- Expand your online presence.
- Improve or expand your physical location.
Types of retail business loans
Many different types of business loans can be used to fund your retail store. Common options include:
Business term loans
With a business term loan, you borrow a lump sum of money from a lender and repay it, with interest, over a specific period of time. Term loans can be good for one-time specific investments in your business.
If you have a larger project, you might prefer a long-term business loan to spread your total costs over a longer time period. Short-term business loans, on the other hand, are better for immediate financing needs.
Business lines of credit
Business lines of credit are more flexible than term loans. A business line of credit allows you to draw from a set amount of funds and only pay interest on the money you draw. When you’ve repaid what you’ve borrowed, you can continue to draw on the credit line.
As a result, business lines of credit are good for managing cash flow needs and covering everyday expenses. They can also serve as an emergency fund.
🤓 Nerdy Tip
If you need to buy inventory for your retail business, you might consider inventory financing. With inventory financing, the products you buy serve as collateral on the loan, making it easier to qualify for than more traditional loan options. Inventory financing is available as a term loan or line of credit.SBA loans
SBA loans are issued by participating lenders, like banks and credit unions, and partially guaranteed by the U.S. Small Business Administration.
The most popular SBA loan, the 7(a) loan, can be used for a variety of purposes — making it a good option for the wide-ranging needs of retail businesses. SBA 7(a) loans are available as term loans and lines of credit.
Equipment financing
Equipment financing is used specifically for buying new or used equipment for your business. These loans typically function like term loans — in which you borrow funds and repay them over time, with interest.
Because the equipment you purchase serves as collateral on the loan, however, equipment financing can be easier to qualify for than some other loan options.
Merchant cash advances
A merchant cash advance, or MCA, isn’t technically a loan. Instead, an MCA company gives you an upfront sum of capital that you repay using a percentage of your debit and credit card sales, plus a fee.
MCAs are usually fast to fund and easy to qualify for — and can be well suited for retail businesses that have substantial debit and credit card sales. Keep in mind, however, that MCAs are often expensive, with APRs reaching triple digits, so you’ll likely want to consider other options before turning to an MCA.
Where to get retail business loans
Retail business loans are available from both traditional and online lenders.
Banks and credit unions
Banks and credit unions will typically offer retail business loans with the lowest interest rates and most competitive repayment terms. To qualify, however, you’ll likely need to be an established business with good credit. Bank loans can take anywhere from several days to several weeks to fund.
Some banks and credit unions are also SBA lenders. SBA loans offer long repayment terms and competitive interest rates. Although SBA loans can be slightly easier to qualify for compared to traditional bank loans, you’ll still need to meet strict criteria to get funding. And like bank loans, SBA loans are slow to fund.
Online lenders
Online or private business loans tend to have greater flexibility compared to loans from banks and credit unions. These lenders typically have more lenient qualification requirements and may work with startups or borrowers with bad credit.
Online lenders also offer streamlined applications with minimal documentation. Some lenders can provide funding in just 24 hours. As a result of this speed and flexibility, however, online lenders often charge higher interest rates.
How to get a retail business loan
To get a retail business loan, you can follow these steps:
1. Evaluate your financing needs
Think about how much business capital you need and how you plan to use it. If you’re looking for ongoing access to funds, for example, a working capital line of credit may be the best option. If you need to purchase inventory, on the other hand, you might consider inventory financing.
In any case, you should also make sure that you can afford to take on any potential debt. A business loan calculator can help you estimate payments and total loan costs.
2. Review your qualifications
Most lenders will use a standard set of criteria — personal credit score, annual revenue, time in business — to underwrite your loan application. It can be helpful to know where you stand on these metrics before submitting your application.
Keep in mind that lenders may also consider factors like your cash flow, available collateral and existing debt obligations.
3. Compare lenders
You’ll want to research several different small-business lenders to find the right one for your needs. As you compare your options, you should consider factors such as:
- Loan types.
- Maximum loan amounts.
- Repayment terms and schedule.
- Interest rates and fees..
- Funding speed.
- Application process.
- Lender reputation.
It can also be useful to read online reviews to get a better sense of what it’s like to work with a particular lender.
4. Gather your documentation and apply
Although the business loan application process varies from lender to lender, you’ll generally be asked to provide the following:
- Basic information about you and your business.
- Personal and business bank statements.
- Personal and business tax returns.
- Business financial statements.
- A description of your collateral.
- Existing debt obligations, if applicable.
If you’ve applied with an online lender, you may be able to receive approval and funding by the next business day. Banks and SBA lenders, on the other hand, may take up to several weeks.
Ready to get funding for your retail business?
- If you think you can qualify for a bank loan: Explore the best banks for small-business loans.
- If you need fast access to funds or can’t qualify for traditional options: Compare the best online business loans.
- If you don’t want to take on debt: Consider alternatives like small-business grants or crowdfunding.
Last updated on August 20, 2024
Methodology
NerdWallet’s review process evaluates and rates small-business loan products from traditional banks and online lenders. We collect over 30 data points on each lender using company websites and public documents. We may also go through a lender’s initial application flow and reach out to company representatives. NerdWallet writers and editors conduct a full fact check and update annually, but also make updates throughout the year as necessary.
Our star ratings award points to lenders that offer small-business friendly features, including:
- Transparency of rates and terms.
- Flexible payment options.
- Fast funding times.
- Accessible customer service.
- Reporting of payments to business credit bureaus.
- Responsible lending practices.
We weigh these factors based on our assessment of which are the most important to small-business owners and how meaningfully they impact borrowers’ experiences.
NerdWallet does not receive compensation for our star ratings. Read more about our ratings methodology for small-business loans and our editorial guidelines.
Wondering if you qualify?
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.
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