Best Hardware Store Financing for Your Business
It’s no secret that the hardware store industry has had difficulty getting financing for their businesses over the years with the advent of big box stores like Lowes and Home Depot. Whether you go to credit unions or banks, it is tough for small business owners to get any type of hardware store financing or any bank loan, for that matter. But these are new times as demand for more personalized service from local stores that can offer quick specialized service is on the uptick. Hardware store financing options can be a tricky process, though. Traditional lenders and credit unions see this business type as they view your industry as risky, which means qualifying for loans is a serious burden. These lenders won’t give loans out to just to any industry; they’ll likely require a business owner to have great credit, a robust business, and require a significant amount of details and documentation from the company to access creditworthiness. AdvancePoint Capital services offer a variety of financing options that you can take advantage of so that you can get the funding you need through our marketplace without the bank hassle. AdvancePoint Capital has been experienced in loans for hardware stores for years and can help you access the various business lending products, terms, and payment options you need. We understand the difficulties of operating a hardware store and the need for business funding to support it. Our job is to effectively provide the best business funding products to you so you can effectively operate your business. Whether you’re looking to purchase equipment or inventory, need working capital, expanding operations, or taking on a new opportunity- we are your source.
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The 6 Best Business Loan Options for the
Hardware Store Industry
Long-Term Business Loans
Short Term Small Business Loan for Hardware Stores
Business Lines of Credit
Small Business Administration [SBA] Loans for Hardware Stores
Merchant Cash Advance for Hardware Stores
Business Credit Cards for Hardware Stores
Benefits of Hardware Store Financing
Cash Flow/Working Capital Loan
Operating small businesses like a hardware store is a complicated venture with many moving parts to it. Various issues can impact cash flow to companies in the industry, such as seasonality, holidays, location, changes in trends, and competition.
Failure to meet payroll for employees is not an option, so it’s essential to access working capital to control the business’s ups and downs and stabilize cash flow. Having a financing option to satisfy working capital needs is a must.
Business Facility Expansion/Renovations
Your hardware store may need upgrades or repairs to the real estate/facility, something to spruce up the interior decor, or renovations to the store’s exterior appearance to attract and maintain customers with a competitive edge. Perhaps you’re adding a new location. With so many financing options available, growing your hardware store can come in many forms. Hardware store financing options can be used to purchase additional inventory, lease more space, expand marketing efforts, buy new equipment, or even open up another operation.
Advertising: Attract Customers to Your Hardware Store
What owner doesn’t want more customers? Internet marketing and social medial is not a trend but has become a must for a hardware store owner looking to grow and has added additional costs to the store operation. That’s why financing for marketing campaigns and social media is so popular.
Having a presence on the internet with various sources such as Google, Yelp, and Trip Advisor and maintaining a social media presence with Facebook and Instagram is very important for success. Your website and work on search engine optimization help keep your small business on the top of google search. Additionally, more traditional sources like mailers and flyers are also advertising mainstays and costs money to execute.
Point of Sale Systems, Software, and Technology Upgrades
The point of sale system’s out there are continuously improving and providing efficiencies to store operations. Hardware stores are always looking for new ways to keep customers coming in and enhance the customer experience or alter services with easier processes and systems for staff to make a significant impact. Funding can be used to update systems and create more efficient processes within your operation. You must make sure eventual investments in this area are a foregone conclusion and know that financing most likely will be needed.
How to Break Down Business Loan Offers/Terms
What are the terms and costs of Small Business Loans?
Interest Rate of Factor Cost
There are two most common types of small business loan rates out there when shopping for a loan. Some business loans charge an interest rate like consumer lending, but others charge a “factor rate” or “factor cost,” which is a flat cost and not principal and interest.
Interest rates are charged based on the daily principle, whereas factor rates are flat costs.
This means you pay the same total cost whether you pay off early or not unless they offer an early pay discount or penalty. But interest rate or factor cost does not tell the whole story. Most lenders charge additional fees, so you have to count those in overall cost when comparing.
Terms of Small Business Loan
The length of the repayment term for loan products varies greatly and can be from 6 months to 7 years, depending on the product and qualifications. Although one loan may seem cheaper than another, you must factor in the length of time of repayment.
You may want to consider a more affordable payment with longer-term versus short-term loans if you are willing to pay more in rate and/or cost for that benefit. If the option is a principal and interest rate loan, then check for the APR (Annual Percentage Rate), which factors not only rate and cost but also the length of repayment and payment frequency.
Installments and Method of Repayment
Disbursements can be monthly, biweekly, weekly, and even daily (weekdays), depending on the business funding product. It is very common for collection to be in the form of an auto deduction from your bank account via an ACH. Although payment frequency can be a factor if you have very low average daily balances in your business bank account, the interest rates, costs, and term should be a more significant consideration than that of payment frequency.
Origination Fees
This is a charge for services at the time of consummation of the loan. The fee is often a percentage of the loan amount, typically ranging from 0% to 5%.
