Bookstore Financing up to $300,000
Books offer an escape for many, a story they can get lost in. The appeal of bookstores goes back hundreds, if not thousands of years. For those looking to open their own, they could receive book store financing up to $300,000 within 24 hours with zero fees, no effect on your credit score, and no obligations.
Everyone who loves to read has thought of opening a book store at one point in their life. Nothing is more addicting than finding that right used book and turning each page until every word is thoroughly absorbed. Books also make great collectibles and gifts. Having a plan for those serious about making a bookstore work is essential. That’s where book store financing comes in!
It isn’t enough to love reading. Luckily, getting book store financing isn’t impossible! Securing funding for your book store is a long road that needs proper attention and preparation. Crafting a plan and having patience is just the beginning. You will also need strong credit scores, clarify the reason for needing the additional income, and meet the requirements of obtaining the loan.
What Is a Book Store Loan?
A book store loan is like other small business loans that millions use to build their businesses. The average terms for a book store loan include a 3 to 10-year payoff time frame. These loans will also carry interest rates that range anywhere from 3% to 22%, depending on various factors.
Many book store loans are secured loans, meaning you must offer collateral to provide better rates. These loans use anything of value in your business as collateral should you not repay the loan. Unsecured loans are available but will demand a higher interest rate and more stringent requirements.
Uses for Book Store Loans
A book store loan can be the funding your business needs to take the next step. Using a book store loan can cover a wide range of things such as:
Inventory – Depending on the catalog of books you plan to offer, this could be as simple as ordering a wide range of titles, genres, authors, bestsellers, and new releases. If you sell used books, then inventory could cost more, especially if you sell vintage books.
Furniture – Reading a bit of a book before purchasing is a must. Keeping your book store open for lounging means investing in furniture like chairs and tables. You will also need shelves, lights, and counter space for the register.
Equipment – Running a book store requires office supplies such as a POS system, shop sign, computer, printer, and all the software to run it all. These purchases add up fast.
Staffing– Whether you’re a small local bookstore or plan to join a franchise, staff will need to be hired. The more staff you hire, the better and more store hours you can provide customers. Hiring employees also makes it possible to run upcoming events.
Cash Flow Shortages – Hard times fall on every business. A book store loan can cover cash flow shortages, allowing you to pay the bills, make payroll, or make necessary repairs.
Book Store Funding Options
Traditional small business loans aren’t the only financing option for your book store. Exploring other methods of financing may help you in specific situations. Here are some book store funding options.
SBA Loan – The SBA, or Small Business Administration, helps small businesses with government back protections. These loans typically have lower interest rates and tools for repayment. They take the form of 7(a) loans, 504 loans, or microloans. You can only qualify for an SBA loan if you’ve exhausted every other financing option.
Merchant Cash Advance – An MCA can help supply funds for short-term expenses. Merchant cash advances work by providing a lump sum of cash that you repay through debit and credit card purchases from your business. This type of loan offers funds quickly and with few requirements but can lead to higher interest rates.
Equipment Loan – Equipment loans are loans specifically designed for the equipment or machinery your business might need. For a book store, that could include point of sale systems, furniture, or bookcases.
Invoice Financing – Invoice financing helps provide working capital to your book store if you have money tied up in pending invoices. These loans provide funding using sent invoices as collateral, so it’s important not to overextend capital borrowed against incoming cash.
Line of Credit – A line of credit or LOC is similar to a business credit card with short-term cash that works as revolving debt. Lines of credit are unsecured forms of credit and are subject to credit checks, limit adjustments, and verification processes.
Tips for Book Stores Trying to Qualify for Financing
Being prepared to open a book store means having your finances in order. There are a few things that will help your book store qualify for financing. First, ensuring your personal credit is up to par will help if you have little to no business credit.
You want to lower your income to debt ratio and keep your daily bank account balances as high as possible. Make sure to investigate your credit scores, both personal and business. You’ll need a 640 credit score or higher for most loans when you’re starting out. Knowing these requirements will boost your book store’s chance of getting a loan.
Finally, you will need an impressive business plan. Lenders want to know how you intend to be successful. A blend of planning and experience is necessary to capture the best funding and rates.
Book Store Loans Pros and Cons
Looking into a book store loan is overwhelming at times. It’s helpful to understand some pros and cons of a book store loan before getting too far into applications.
Getting a book store loan has several clear benefits, not just a quicker way to expand your business. A book store loan can provide you with cash when cash flow is an issue, and you don’t have to sacrifice any of your business’ potential equity.
Unlike other forms of funding, a book store loan is generally less expensive than other forms of financing, such as credit cards or a cash advance. Loans provide the freedom that you can’t get with alternative funding.
There are some cons to be aware of, as with everything in life. First, obtaining a loan requires a lot of paperwork—everything from applications to credit checks and proof of income or tax records. The paperwork will only be worth the work if you have a strong credit profile, which requires years of work in some cases.
Not only is the application process lengthy, but once approved, funds often take more time to become available. This delay could be costly if you need cash quickly. Plus, loans have strict repayment terms, and if you struggle to repay, assets could be at risk.
Frequently Asked Questions on Book Store Loans
It’s only natural to have a few questions about book store loans, so here are a couple of the most common ones that potential book store owners ask.
A book store could need financing for several reasons. Perhaps inventory is getting low and needs to be replenished. Or maybe cash flow is lagging. Or perhaps an expansion, new location, or advertising is in the future.
With some forms of funding, like Merchant Cash Advances, your book store can have cash in as little as 24 to 48 hours. With lines of credit and business loans, look for the timeframe to be in the weeks to months. Traditional loans typically take between a few weeks to a few months depending on the type and amount.
The cost of opening a bookstore will vary. Popup book stores use existing retail space in a partnership agreement and cost as little as $10,000. Brick and mortar bookstores tend to cost more, typically around $250,000.
At the very minimum, banks want a personal score of 640. More realistically, however, banks want a 720 credit score or a business credit score of 75. With alternative funding sources, such as merchant cash advances, the credit score can be as low as 500.
There are several things to look for when choosing a lender. How much does your book store need? What type of terms can your book store afford? How do you plan to cover these expenses?
Getting a business loan for your book store is like getting other loan types. The best way to make getting a book store loan easy is to review the requirements, ensure you meet them, plan how to use the money, and how to repay the loan.
Funding Your Business Is Our Business
Book Store Loans Can Help Your Business Grow
Growing a business is challenging, and growing a book store can be even more difficult in our modern age. Bookstore financing can make the difference between going under and expanding. While it can be tempting to jump right in and start applying for a business loan, there are things to keep in mind, such as terms and repayment requirements.
In addition to repayment, getting a low also demands specific criteria to be met. It’s always a good idea to have a detailed plan to make getting a book store loan easier. Weigh the pros and cons of the wide variety of book store loans and find the option that works for your business.
Does Your Business Need Funding Today?
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$5,000 – $1,000,000
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