What do I need to know about liquor store business loans?
While the big chains have taken over many of the types of stores that we go to every week, one exception to this is the liquor store. You can find “Mom & Pop” liquor stores sprinkled on corners all across the wide expanses of Canada and the United States.
So if you’ve done the market research about where to open a new liquor store, or if you’re in discussions about buying a liquor store from someone who is ready to get out of the business, then you’re at an exciting point. Or if you’ve already opened your store, and you are more enterprising in your marketing than the competition, you may see that business is steadily climbing. In instances like that, you have an exciting chance to expand your operations – maybe by opening a second location or by moving your store to a more accessible point in a nearby retail center. You also may be at a point where you can upgrade the fixtures in your store, because while some people are simply on a mission to find that case of Labatt’s Blue or they want to pick up some Lot No. 40 or some Pike Creek for a chill night with some whiskey, a lot of shoppers are also looking for some class in their ambiance, and when you have the funds, making some upgrades can help your business significantly.
Why do people need loans for liquor stores?
So let’s say you’ve been open for about a year now, and your business is on the upswing, and you’ve heard about a corner spot at the retail strip center about a mile down the road that’s opening up in two months. The rent is about three times what you’re paying now, but there’s a lot more visibility center, and that retail center is only about a year old, while the one where your store is now looks shoddy at best with no curb appeal. You’ve used one bank your whole adult life – checking, savings for yourself, and even your investments, and then checking for your liquor store. You go in and ask about what a loan for a liquor store would entail.
Instead of grinning and asking you how much you need, though, that same bank investment advisor who signed you up for that investments and says hello every time you come with another business deposit gives you a small frown and asks to run your credit. You wince a little bit, because your husband had thyroid cancer about a year ago. He had to miss work for about nine months because of complications from the surgery and the combination of radiation and chemotherapy, and you guys fell way behind on your bills. You almost lost your truck, and you had a couple of credit cards get maxed out and go 120 days past due. Everything is paid off now, thanks to him going back to work, but your personal credit score has some big holes in it. Your business credit score is still pristine, but the fact that your personal credit has taken some big hits this past year is an area of concern. Also, your store has done really well, but it’s not quite been a full calendar year since you opened, so you don’t have THAT much income history – and what happens if your husband gets sick again? More than a little frustrated, you stamp out the doors of that bank that has so much of your money but won’t lend you a dime to expand your business.
How can I find a business loan for liquor store operations?
So now you start searching terms like “business loans for liquor store” and “small business loans liquor store.” You find other banks that say that they will help small businesses out, but that experience with your own bank really made you sore. You think that the only way that you can solve the problem is to chug away another year or two at your current location and save up the money that you need, hoping that a similar spot is available when you have the money on hand to make the move – and make it the classy way.
Before you commit yourself to another year in that old building, though, take a look at what’s available through BBC. BBC is here to work with entrepreneurs like you in mind. Business owners are seeking alternative loan options for liquor store expansions – as well as loans for anything from a bistro or a florist to a medical office or a construction company. There are a lot of entrepreneurs out there in the same boat that you are – they have put together a solid business plan and have seen several months – or even more than a year – of successful operation, but they simply can’t find the funding that they deserve to get to the next level.
How can merchant capital advances help me with liquor store financing?
This is where merchant capital cash advances come in. BBC has a network of funders that want to help entrepreneurs pay for the expansion of their businesses without having to go through the hassle of dealing with loan officers at banks. If you had heavy six figures in the bank to invest, you wouldn’t need the money, but why should you have to wait for several years to make the expansion that you could manage successfully now?
Here’s how the process works. You fill out one application and provide necessary documents. The appropriate lender will run your personal and business credit scores, because they are important – but they’re not the primary factor in our lenders’ approval process. The primary factor is your revenue at your business, often your credit and debit card receipts, because many lenders will take their payments out of those revenue streams.
Once you’ve applied, the priority lender that approves your advance will send BBC a conditional term summary with an advance amount, a factor rate, and a rate of repayment. The advance amount is the number on the check that you will receive (less any fees). The factor rate shows how much you will have to pay back, and the rate of repayment tells you how much of each day’s or week’s receipts will go directly to the advance provider.
Let’s say you get approval for a $300,000 advance, with a factor rate of 1.2 (you’ll usually see factor rates between 1.15 and 1.45). The higher the factor rate, the more you pay back; you can get a lower factor rate with more income coming in each month – or with a smaller advance request. Your credit scores may also play a role in the setting of the factor rate, depending on the lender.
So you would pay back $300,000 x 1.2, or $360,000. Let’s say that the repayment rate is set at 15%. That means that each day (or each week, depending on your lender), 15% of your receipts will go to the advance provider. Some providers take this from your credit and debit card receipts only, while others set up different repayment arrangements, but one element in common is that you pay a percentage of your receipts.
The upside: flexible payments – when you have slow days, you pay less, and there are no late payment fees – and quick approval – often a few business days. You have the money that you need, and as your business increases, you’ll pay back the advance quicker than you think.
Want more information? Call or email BBC today!