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What Indie Retailers Need to Know About Small Business Loans


Hana Dickman

You have a niche market and a product selection your audience raves about. You’re doing great on a small scale, but you have big plans for your indie retail business. There’s only one problem – capital. You have the foundation in place to support your small business growth, but you don’t have the cash flow to expand your inventory, business operations and storefront.

Small business loans offer a funding source you can use to take your business to the next level, but you have some important considerations to keep in mind before pursuing one.

Small Business Loan Qualification

The first hurdle in the small business loan process is qualifying for the loan. Banks and other lenders have their own qualification criteria, and may look at your personal credit when considering whether you qualify for a business loan.

While personal loans primarily look at your credit score for qualification, business loan lenders look at other factors, such as your invested equity, access to other funding sources, current and future projected cash flow, business stability and proposed fund use.

If you haven’t already, creating a thorough business plan covers many questions a lender is likely to ask. Online lending platforms typically have less stringent requirements and consider the broader health of small businesses — these may be better options than traditional small business loans.

Small Business Loan Limits

Small business loan limits vary depending on the lender, but are significantly higher than most personal lines of credit. For example, the Small Business Administration loan limits exceed $1 million. Have a financial plan in place on how to use the funds before the money comes in, so you put it towards the most beneficial areas for your indie retail business.

Interest Rates

It’s common sense, but don’t borrow more than you need, especially if you have a startup indie retail business. You don’t know exactly what your cash flow is going to be, whether you’re heavily affected by seasonal demand or one of the many other factors affecting how much your business brings in. The interest rate on the loan adds up fast with larger loans, so keep your small business funding in line with your projected needs.