The Best Cheat Sheet For Funding Your Brick-and-Mortar Business

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For decades, the American dream has been to own your own business, and that dream continues to live strong today. While some turn to online options, the number of people choosing to open their own brick-and-mortar stores continues to rise, which comes as no surprise since 49% of Americans report preferring to shop in physical locations. While there are many benefits to owning a brick-and-mortar store, it may be tricky navigating the funding process. Fortunately, there are many options available for those seeking to make their dreams a reality. If you count yourself among this growing group of driven men and women, keep reading to learn how to fund a brick-and-mortar store.

Small Business Loans

New and established business owners can greatly benefit from taking out a small business loan. A small business loan is a form of financing offered to companies by different lenders for varying purposes. There are a few types of SBL available, allowing you to select the one that best fits your business plan, including the following:

Line Of Credit

A line of credit is like a credit card for your business. It allows you to borrow to a specific limit and only repay interest on the amount used. One of the best benefits of a line of credit for small businesses is the ability to continue to draw out funds as needed if you stay within your pre-approved limit.

Working Capital Loans

Working capital loans are different than most typical loans as they are used to pay for your everyday operational expenses. You can use a working capital loan to pay for your rent, debt, or even payroll, which can be a lifesaver in emergency situations. These SBLs offer lower amounts and shorter terms and may be linked to your personal credit score, which can decrease if you aren’t making payments on time.

SBA Loans

An SBA loan is guaranteed by the US Small Business Administration, a federal agency helping entrepreneurs scale their businesses. Since it is guaranteed, you will still receive your payout from the SBA even if you’re unable to repay the lender. The Small Business Association will guarantee up to 85% of loans $150,000 and under or 75% on loans exceeding that amount. As you can imagine, due to their payment guarantee, SBA loans are extremely difficult to get but are an excellent option for those who receive approval.

Additional small business loans that are not mentioned above but do provide excellent funding options include:

  • Accounts Receivable Financing
  • Small Business Term Loans
  • Equipment Loans
  • Small Business Credit Cards

If you are interested in applying for a small business loan, there are multiple options available:.

  • Commercial Banks
  • Direct Online Lenders
  • Community Banks
  • SBA-Backed Bank Lenders
  • Peer To Peer Lending Sites

Find An Investor

Finding an investor can be an excellent way to fund your brick-and-mortar store, but you should take time to fully understand all the terms of their investment before signing on. Angel investors are people with a large net worth who use their money, connections, background, and resources to help startups find success. Generally, one angel investor will make all the financial contributions, so you won’t need to find multiple investors for your business. While it can be great having someone provide funding, there are some downsides to be aware of. Many investors expect a significant ROI, so they don’t offer funding to just anyone. They will also receive a share of your company and may want a say in some of your business decisions. While not every investor asks for these terms, most do, so be sure to do your research, ask questions, and never rush into a decision. Check out Angel Capital Association for a list of Angel investors in each state.

Start A Savings Account

If you’re unable or unwilling to take out a loan or find an investor, you can choose to start a savings account and use it to save up for funding your brick-and-mortar store. While this option takes longer, it also provides you with the money outright without putting you into debt. You can try saving a set amount every paycheck by using direct deposit, so you don’t have to worry about forgetting to transfer the money or spending it. Many banks offer high-yield savings accounts, so be sure to check with your local branch to see what options are available to you.

Cut Back on Unnecessary Expenses

Did you know that American’s spend around $18,000 a year on average on unnecessary expenses? That amounts to over $1,400 a month! Limiting the amount of money you spend on items you don’t need can quickly add up to funding for your brick-and-mortar business. A little bit of sacrificing now can pay high dividends in the future!

Sell Products Online or at Local Markets & Events

While having a brick-and-mortar store may be your end goal, you don’t have to wait to open your business. Selling your products online or at local markets and events is an excellent way to begin making money and building your client base. This strategy is highly effective and used by many businesses to gain the funding needed to open a physical location. Not only does selling your merchandise online provide you with cash flow, but it allows you to start building brand awareness. Plus, once you do save enough to open your brick-and-mortar store, you can continue selling online, effectively doubling your reach!

Funding your brick-and-mortar store may seem like an overwhelming venture, but with the right tools and guidance, you can make your dream a reality. At Brick N’ Mortar, we offer a comprehensive step-by-step approach that will give you the confidence to build, open, and grow your small business with the support and encouragement necessary to succeed! At Brick N’ Mortar, we take the complexities out of opening a physical store location with a clear roadmap, so you are prepared for the road ahead. Don’t go at it alone; let Brick N’ Mortar Academy show you the way.

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