How Inventory Loans for Retail Businesses Can Help Your Business Thrive

Business Funding - 6 Min Read

This blog was last updated on February 1, 2021.

It’s no secret that retail businesses revolve around inventory. If you run a retail business, you likely spend the vast majority of your working days dealing with inventory needs. From ordering new inventory and calling your suppliers to meticulously tracking products, there are plenty of inventory-specific needs to manage.

To take some of the pressure off, you may be considering taking advantage of fast inventory loans*. Depending on your unique business needs, inventory loans for retail businesses can provide you with the capital necessary to maximize your inventory tracking system and keep your shelves full of product.

5 Benefits of Inventory Loans for Retail Businesses

Inventory loans for small- to medium-sized businesses can be a great way to keep operations running smoothly. And, while the additional working capital can be used for any business purpose1, there are a few common ways retail business owners can choose to support their inventory needs.

Below are five ways inventory loans for retail businesses can benefit your operations.

1. Avoid Product Shortages

Most retail business owners have struggled to keep their top-selling products on the shelf at one point or another. And keeping your best-sellers stocked is key to catering to your customer’s needs.

For example, when a customer visits your store and can’t find the product they want, they’re likely to leave without making a purchase. Plus, they may even opt to choose your competitors over you in the future if they perceive your business as unreliable at fulfilling their needs.

To help manage this concern, a business inventory loan can help you get ahead of the game and keep your most popular products well-stocked. To get started, use your store’s sales data to forecast your biggest selling items and the busiest weeks of the quarter. Then, order extra inventory to make sure you don’t sell out prematurely.

Keeping inventory on-hand is an excellent way to make sure your customers don’t leave disappointed, so don’t let cash flow be a reason to run your business light on inventory.

2. Accept Larger Orders

Have you turned down customers in the past because you couldn’t fulfill their orders? Taking large orders can help pad your bottom line, and it’s wise to encourage bigger orders whenever possible. Also, keep in mind that any order could be the start of a lifelong customer relationship. And in terms of your bottom line, it often costs much less to maintain customers rather than acquire new ones.

Of course, it’s hard to be prepared for a large order when you don’t have enough working capital to purchase the necessary inventory. But with a business loan at your disposal, you can have the extra capital on-hand to fulfill bulk orders and encourage your happy customers to continue working with you.

Consider the following scenario. If you take out a business loan for $20,000 to fulfill a $50,000 purchase order, you’ve created significant profit despite the borrowed amount. Plus, you may have earned future business with that same customer down the road – another avenue that can add to your profits.

Make sure you’re considering retail inventory loans as a potential source of growth and revenue rather than a financial burden.

3. Invest in Updated Inventory Tracking Methods

For many retail business owners, getting ahead on inventory starts with keeping track of product count carefully to minimize loss and shrinkage. And if you’re currently tracking inventory the old-fashioned way with an Excel ledger and no automation, consider using a business loan to upgrade your current ways.

A complete inventory management system should be unique to your business’ needs, but some improvements you can make include:

  • Purchasing inventory management software
  • Upgrading your equipment such as a new computer or tablet
  • Buying a scan gun or barcode printer
  • Adding a new card reader for more convenient payments and seamless tracking

With some of the above upgrades, your inventory team could scan barcodes with ease, cutting down on the manpower and payroll hours needed to get the job done. And along with improved efficiency, you could also save significantly in terms of resources and cost in the long run, making the investment into the equipment more than worthwhile.

4. Expand Your Product Line

If you’ve set a goal to tap into new product lines but have been held back by finances, an inventory loan could be the right solution. Keeping a wide variety of products on your shelves can not only keep current customers interested in your brand but can also lead to a new customer base, too.

To begin looking for new product opportunities, take a look at your current product line first. Are there any accessories to your popular products that you don’t yet carry? If you sell food or beverages, could you expand upon the flavors you currently stock? Consider what your current customer is likely visiting your store to purchase. Then, brainstorm what other items are convenient add-on purchases to your best sellers.

Expanding your product line takes more than just research, though. In order to stock new products and keep up with your overall inventory counts, you’ll likely need additional capital – which can be acquired through a business loan.

5. Prepare for Seasonal Demands

While not every retail business experiences significant changes in purchasing patterns throughout the year, seasonal businesses are well-acquainted with the ebbs and flows of demand for their products. These seasonal demands can be extremely lucrative, but they can also be difficult to manage during the off-season when sales aren’t at their peak.

For example, if your retail business sells swimwear, spring and summer are likely top-performing seasons. On the other hand, if you stock snowboards and ski accessories, the winter months are likely much more profitable than the summer months. Whichever season brings in the most sales for your business, it’s important you have the funds needed to stock up on inventory for your busiest months.

And, in addition to putting capital towards your product counts, keeping some of your cash saved for your slower months can be just as beneficial. If you make the bulk of your money during certain seasons, having some saved working capital can help sustain your business during slower periods.

An inventory loan can be just the right solution to supporting your retail business through both your busiest times as well as your slower months.

Choose a Lending Partner Who Cares About You Succeeding

If you’re interested in an inventory loan to help your retail business thrive the next step is to find the right lending partner to provide you with access to that capital. During your search, keep in mind that it’s important to choose a funding partner who is genuinely interested in your success as a business owner.

Mulligan Funding is a private, family-owned business that specializes in providing access to funding to small- to medium-sized businesses nationwide**, so we understand the unique challenges you face as an independent retailer. And most importantly, the team at Mulligan Funding sees you as a partner, not just a financial transaction.

When you partner with Mulligan Funding for an inventory loan for retail businesses, you can expect benefits such as:

  • A seamless application process
  • High approval rates
  • Convenient daily repayments
  • A variety of loan types to meet your needs

Furthermore, Mulligan Funding’s team of financial experts is happy to answer questions you have about the lending process. If you’re not sure how much capital you need to get your inventory in order, or whether you need a working capital loan or another type of business financing, an expert from Mulligan Funding is only a call away to help you find the answer.

Why wait until tomorrow when you can overhaul your inventory management today? Call Mulligan Funding at 855-326-3564 to discuss your financing options today!

The information shared is intended to be used for informational purposes only and you should independently research and verify.

Note: Prior to January 23, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.