Financing for retailers
Stock has to be bought before it can be sold, and the busiest quarter is the one that needs paying for first.
How the money reads
An underwriter reads six months of statements. This is what yours usually says.
- Card and platform settlements land steadily; Shopify, Square or Stripe payouts are read the same way as a terminal's.
- The year is rarely level — a fourth-quarter peak is a pattern, not a red flag.
- Inventory turns are what makes a stock purchase repay itself, and they show in the account.
The thing that slows these files down
If payouts arrive from several platforms into several accounts, send them all. The most common reason a retail file comes back smaller than it should is that half the revenue was invisible.
What it usually pays for
- Buying stock ahead of a season
- A fit-out, a relocation, or a second storefront
- Smoothing the months between buying and selling
What an underwriter asks
The same four things decide every file: revenue and how long you have been making it, the cash cushion, bounced payments, and what you already pay other lenders. Here is what those look like in this trade.
- Where does the money actually land?
- Shopify, Square, Stripe and a card terminal can pay into three different accounts. Every one of them is revenue, and every one of them has to be in the file or the business reads smaller than it is.
- How fast does the stock turn?
- Inventory that turns is inventory that repays a loan. The pattern shows in the account: purchases going out, sales coming back, and how long the gap between them runs.
- What does the fourth quarter do?
- A Q4 peak is a pattern, not a warning. Six months ending in January include it; six ending in September do not. Either is fine, and it is worth saying which one your file is.
The whole method, in one page: giving yourself the best shot.
Asking for the right amount
For a stock buy, ask for the cost of the stock. Tying the number to a purchase order rather than to a round figure is the difference between an offer and a conversation.
Across every trade the anchor is the same: roughly a month of revenue, and never more than the statements support. Everything you already pay lenders counts toward a ceiling of 20% of monthly revenue, so what is already running matters as much as what you are asking for.
When to ask
Stock money is wanted before the season, which means applying a month earlier than feels necessary. Buying for the fourth quarter is a summer decision.
Have these ready as well
On top of the standard file — six months of statements, your incorporation documents, your CRA business number and photo ID.
- Payout statements or reports from each platform you sell on
- Bank statements for every account those payouts land in
- A supplier quote or purchase order, for a stock buy
- The lease, for a fit-out or a new storefront
What usually fits
In this order, more often than not — though the file decides, not the trade.
Revenue-based line of credit
Draw what you need, pay for what you draw, and the limit moves with what you turn over. For months that are uneven rather than short.
Up to $500,000
Term loans
A fixed amount, a fixed schedule, and nothing pledged against it. The straightest answer when you know the number and the timeline.
$5,000 – $2,000,000
Asset-based lending
Your receivables, inventory or equipment doing some work while you still hold them. Usually the cheapest money on this page.
$50,000 – $2,000,000
Where these files get harder
None of these is an automatic no. They are the things that turn a one-day decision into a conversation, and all of them are better said by you than found by an underwriter.
- Revenue spread across platforms and accounts with only some of them sent
- A business trading under six months, since six months of statements is the file
- Deep seasonality with no contracted or recurring revenue underneath it
Questions
- I sell online and in a shop. Does that complicate it?
- No, as long as both sides are in the file. Platform payouts are read the same way as terminal settlements.
- Can I borrow against stock I already hold?
- That is asset-based lending, and it is one of the four things we place. It depends on what the stock is and how readily it sells.
- My best quarter is not in the last six months. Does that count against me?
- It is read in context. Say so in the one-line use of funds — an underwriter who knows the peak sits just outside the window reads the window differently.
- Do you fund e-commerce with no storefront?
- Yes. The requirement is an incorporated business with six months of statements, not a lease.