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Commercial Finance for Opening A Shop

Finance for opening a shop

During the recent COVID-19 pandemic, many people were furloughed, and used the time away from their usual workplace to explore starting their own business. Small businesses often based around crafts or baking have popped up around the United Kingdom; those that have been most successful have continued beyond lockdown with people even choosing to give up their former jobs to concentrate on running their new business. Some people have been so successful that they have outgrown their home and need to open premises; this can be a costly move so we’ve compiled all the information you will require about commercial finance for opening a shop. 

Successful Start-Up to Opening a Shop

It is a fact that most start-up’s fail within the first twelve months. For a minority, business booms and what started out to be a small home business, generating a side income, becomes a huge success taking over the owner’s home and life. Baking businesses appear to be one of the big successes coming out of the pandemic; but there are also people selling their art and other crafts from amateur sewers making beautiful clothing and accessories, to plumbers crafting artwork from metal pipes and everything in-between. As sales boom space to create, store and process their makes becomes increasingly difficult when working out of a family home. 

With social media often being the marketing tool of choice for home businesses, for the lucky few, demand for products can quickly outstrip the owner’s ability to produce and supply from home. Where local demand is high, particularly for baked goods such as brownies, cookies, cake, and doughnuts, opening a shop seems to be the next logical step. However, opening a shop isn’t cheap, this is where commercial finance comes in as small business owners seek to secure the required cash flow to realise their dreams. 

Cash flow for Opening a Shop

Securing premises, fitting them out to suit the requirements of your business and paying for additional equipment, tools and raw materials can amount to a large initial investment. Cashflow, specifically enough available cash to pay these costs, is usually the biggest stumbling block for small businesses wanting to take the next step and open a shop. Fortunately, commercial finance may be available to provide a boost to cash flow. Finance options may include:

  • Business Loan
  • Asset Finance 
  • Merchant Cash Advances
  • Small Business Grants 

Continue reading below to find out more about each of these options. We certainly recommend doing your homework and finding out as much as you can to ensure that any finance you take on can be repaid. There is no substitute to expert advice from an experienced commercial finance broker, such as MC Commercial Finance. A broker can not only assess your situation and offer advice on the best type of finance for your requirements; they can also help you with the application process and to secure the best deal. Book an appointment with MC Commercial finance to discuss your next steps.  

Business Loan 

One of the most common types of business finance is a business loan. A loan provides an instant cash boost that can be used for a wide variety of purposes, including:

  • Upfront rent payments
  • Shop renovations
  • Purchasing equipment
  • Raw materials and packaging
  • Paying salaries

Securing a loan in the name of your business may be tricky depending how long you have been operating. Some banks may require a comprehensive business plan and to review recent accounts. Therefore, it would be wise to ensure that you have a good grasp of your business finances and disclose the full situation to a broker in order ensure that you receive the best advice and give yourself the best chance of securing a loan. 

Asset Finance

If you need to purchase equipment that is necessary for the running of your business, then asset finance may be an appropriate choice. In the case of a bakery, equipment such as commercial fridges and ovens would be appropriate to finance via asset finance. There are several different types of asset finance that can be used depending on whether you want to eventually own the equipment, or to lease for a set period. No matter your business if you require expensive equipment for your business to function asset finance may be available to help you equip your new shop. 

Merchant Cash Advances

For customer-based businesses, merchant cash advances may be a viable option. If you have already been taking payment via a card payment terminal, you may be able to use recent sales data to take out a cash advance against future sales. This form of lending is only suitable if your business is already turning over a high volume of sales, as lending is usually limited to approximately a month’s worth of sales; therefore, to secure enough to help you to open a new shop turnover would need to be relatively high. Merchant cash advances are likely to be an ongoing source of available finance as your shop thrives, therefore, it is worth finding out about – you can find out more here. 

Small Business Grants 

When starting-up or growing your small business it is always a good idea to investigate what grants may be available. Grants are usually specific to a location or type of industry; therefore, local knowledge is often beneficial. A broker or accountant can help to offer advice and research what may be available to you. A grant is a sum of money to be invested into your business, usually provided by government, local government, or other organisations. Crucially a grant does not have to be repaid, but you would have to demonstrate how you to intend to invest the funds and that your business is viable. Applying for and securing a grant can be a competitive process, for which it is certainly worth getting expert advice and support. 

New Shop Commercial Finance

Taking your at-home business to the next level and opening a shop can be a daunting idea, that seems vastly infeasible due to cash flow requirements. However, with some expert advice and appropriate commercial finance opening could easily be within your reach. Contact MC Commercial finance today and take the first step to find out more about commercial finance for opening a shop.