Bike Store Financing up to $450,000
Cycling has become increasingly popular over the last few years with people trying to get out and about in a safe way during the pandemic. Small business owners are capitalizing on the boom in popularity. We can offer up to $450,000 in bicycles shop financing within 1 business day with no impact on your credit score or fees.
There’s nothing like swinging a leg over a model that catches your eye and taking it for a ride. As a matter of fact, bike-related sales hit $8.2 billion in 2020, a $2.2 billion rise from 2019. Shop owners love seeing a smile spread across a customer’s face as the perfect bike glistens in the shop window. These moments solidify the dream of owning a bicycle shop, and looking to the future means success.
Starting a small business can be costly, but luckily, there are methods of financing to keep the dream alive. While traditional loans are available, forms of funding have changed with the times.
What Is a Bicycle Shop Loan?
A bicycle shop loan is, at its heart, a small business loan. It is important to note that loans aren’t the only type of financing available for new bike shop owners. Other options include cash advances, invoice financing, and lines of credit.
A lender provides this loan with a set of terms that you must follow to keep your assets. These loans are most often secured loans, which use assets from your business as collateral, should you decide not to make monthly payments.
It’s common to have a fixed monthly rate. This rate includes principal amounts and interest, ranging anywhere from 2% to an astronomical 24%. These rates are mainly dependent upon which type of loan you decide is right for your bicycle shop. Many loans will bear a fixed payoff schedule that can range from three to ten years.
While secured loans are a standard and an established way of keeping rates low, unsecured loans are also available. These loans don’t rely on collateral to protect the lender if repayment falls behind. Because of this, many of these loans carry higher rates and stricter requirements to qualify.
Uses for Bicycles Shop Loans
There’s nothing like a physical store to shop for bicycles- a place a child can buy their dream bike or where one can shop for the latest mountain bikes. That’s where a bicycle shop loan comes in handy. You can us bicycle shop financing to:
- Replenish your inventory- bikes, pumps, helmets, safety pads, accessories, replacement parts
- Upgrade your current stock with the newest models- Popular brands include Giant Bikes, Trek Bikes, Specialized Bikes, Cannondale Bikes, Diamondback Bikes, Santa Cruz Bikes, Marin Bikes, etc.
- Growing your staff- bringing in extra hands to help with sales
- Customer service
- Buying/renting shop space
A bicycle shop loan is a great way to expand your shop. Perhaps an electric bicycles shop dedicated to pedal-assisted e-bikes. Or maybe invest in a website and launch your brand as the best way to buy bicycles in an online shop. Regardless of why you need a bicycle shop loan, there are countless uses for one.
Bicycles Shop Funding Options
When running into the problem of financing your bike shop, it’s easy to believe there are only a handful of funding methods. But in reality, there are more options than meets the eye, and several offer alternative terms compared to a traditional small business loan.
SBA Loans: SBA Loans are loans from the government that is the last resort for your small business. These loans exist to provide support in hard times. However, the requirements are strict, and not every business qualifies for an SBA loan.
Commercial Cash Advance: Also known as a merchant cash advance, these work similarly to personal cash advances. Money comes quickly, and the payoff comes with future funds. Merchant cash advances take a percentage of credit payments to your store until the loan is paid off.
If approved, a Merchant Cash Advance provides funds quickly but has steep interest rates. This option is especially good for business owners who are just starting out or who are working on increasing their credit score.
Equipment Loans: Equipment loans dedicate funds specifically for the equipment in your bicycle shop. You’ll be able to get tools, stands, cash registers, and other equipment you might need to run your shop. The downside to an equipment loan is they’re typically limited to equipment only and not for payroll or other needs.
Invoice Financing: Invoice financing leverages the incoming money from outstanding invoices to pay back. This funding method is excellent if your invoices have a long turnaround time. However, it’s not great if you overreach and the invoices no longer cover the financing.
Line of Credit: Also known as LOC, a Line of Credit works very much like a credit card. You borrow a lump sum of money up to your credit limit, which has a monthly bill. A line of credit offers flexible spending but also has high-interest rates and strict qualifying requirements.
Bicycles Shop Loans Pros and Cons
Before making a big decision, like obtaining a bicycle shop loan, you should always weigh the pros and cons.
Bicycle shop loans are excellent at injecting needed capital into your shop. They are a stable and trusted way to get the funds to expand, cover expenses, or upgrade your equipment. Generally speaking, bicycle shop loans will offer the best interest rates and terms compared to other financing forms.
Bicycle shop loans also offer more flexibility than other funding. Where invoice financing and LOCs can provide short-term funding, they often restrict your shop’s finances with higher interest rates.
However, while bicycle loans offer great rates and terms, they’re often quite challenging to meet the requirements. In extreme cases, you may need a co-signer, meaning someone outside the business is on the hook for your finances. The application process can also be extensive.
Because of the lengthy application process, funds are slow to be paid out. A delay of weeks or months can mean the difference between making it and going under. Unfortunately, this is a reality for bicycle shop loans. Plus, the funds don’t come immediately when you’re finally approved.
Tips for Bicycles Shops Trying to Qualify for Financing
Securing financing for your bicycle shop doesn’t have to be complicated. The first place to start is to look at your personal finances. If you’re just starting out in business, banks want to see that you can manage your personal finances before trusting you with large sums of money.
Once your finances are in order, the next step is to create a business plan. Again, it’s advantageous if you have a background in business and even better if you have experience running a bicycle shop. You will describe why you need the money, how you intend to pay it back, and your market research to prove you have a viable business.
A business credit score of at least 75 or higher is best. At a minimum, a 640 personal credit score will build your case. Debt to income should be low and derogatory marks against you should be cleared off your reports. It’s also worth challenging incorrect information on these reports. Sometimes the poor mark can be dropped.
Always know exactly what the terms of your loan or financing entail including interest rates and the repayment period. Beware hidden fees and costs and do your research to ensure you’re working with a reputable lender.
Frequently Asked Questions on Bicycles Shop Loans
Owning a shop for bicycles comes with some inherent questions. Here are the most common bicycle shop loan questions.
Bicycle shops require more space than many other shops, and bicycles often cost several hundred to a couple thousand per bike. These are your highest costs and typically add up to $350,000 on the high end.
Banks and traditional lenders love to see scores above 720. However, merchant cash advances will accept a minimum score of 500.
Bicycle shops need financing for many reasons, including falling short on funds, inventory replenishment, expansions, upgrades, new services, or even making payroll.
Traditional bicycle shop loans can take weeks to months, depending on the lender, requirements, and your scores. Other types of funding, like a merchant cash advance, provide funding in as little as 48 hours.
Getting a bicycle shop loan is easy if your finances are strong and your business plan is solid. Otherwise, if your finances are less than desirable, you may have some leg work to do before qualifying for a bicycle shop loan. Depending on your situation, that may be somewhat challenging.
Funding Your Business Is Our Business
Bicycles Shop Loans Can Help Your Business Grow
Owning a bicycle shop is like no other journey, but growing your business can be challenging unless you have a plan. A bicycle shop loan can accelerate that growth by injecting funds for vital needs like new inventory, updated materials, and hiring new staff. It also provides leverage to branch out into new territory like electric bicycle sales.
A traditional bicycle shop loan works for some. Still, if a loan doesn’t meet your needs, other financing options are available. These options provide cash quickly but could be more expensive in the long run. So it’s best to weigh the pros and cons, work on your personal finances, and craft a plan that lenders can’t ignore.
Find The Best Payment Processing For Bicycle Shops
Small bicycle shops rarely accept or process credit cards. By not accepting credit cards, you will have a hard time getting financing both now and in the future. Credit card sales serve as proof to lenders that your bicycle shop is doing well. mCashAdvance™ can help you accept credit cards. Bicycle shops can easily process credit cards with our small business payment processing service. If your bicycle shop already accepts credit cards but you are tired of paying high processing fees, then you should seriously consider moving to mCashAdvance™ payment processing. You don’t have to pay any more processing fees as we eliminate them. Access zero fee payment processing now.
Does Your Business Need Funding Today?
There’s no fee or obligation, and it won’t impact your credit.
$5,000 – $1,000,000
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