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Financing for retailers

Stock has to be bought before it can be sold, and the busiest quarter is the one that needs paying for first.

How the money reads

An underwriter reads six months of statements. This is what yours usually says.

  • Card and platform settlements land steadily; Shopify, Square or Stripe payouts are read the same way as a terminal's.
  • The year is rarely level — a fourth-quarter peak is a pattern, not a red flag.
  • Inventory turns are what makes a stock purchase repay itself, and they show in the account.
A month, roughlyTiming only — no amounts
Card and platform payoutsStock buys

Sales come in a little at a time. Stock leaves in lumps, and it leaves before the season it was bought for. The gap between the two is the whole reason retailers borrow.

The thing that slows these files down

If payouts arrive from several platforms into several accounts, send them all. The most common reason a retail file comes back smaller than it should is that half the revenue was invisible.

Warm interior of a cozy small shop in Osaka, featuring an Asian woman working, surrounded by local goods and decor.

What it usually pays for

  • Buying stock ahead of a season
  • A fit-out, a relocation, or a second storefront
  • Smoothing the months between buying and selling

What an underwriter asks

The same four things decide every file: revenue and how long you have been making it, the cash cushion, bounced payments, and what you already pay other lenders. Here is what those look like in this trade.

Where does the money actually land?
Shopify, Square, Stripe and a card terminal can pay into three different accounts. Every one of them is revenue, and every one of them has to be in the file or the business reads smaller than it is.
How fast does the stock turn?
Inventory that turns is inventory that repays a loan. The pattern shows in the account: purchases going out, sales coming back, and how long the gap between them runs.
What does the fourth quarter do?
Six months ending in January include your fourth quarter. Six ending in September miss it. Either is fine — say which one you are sending.
Six months of statements, read
  1. 1Revenue, and how longThe monthly average, and the years behind it
  2. 2The cash cushionAverage daily balance, against a month of revenue
  3. 3Bounced paymentsNSF and returned items over ninety days
4
What you already pay lenders

Totalled against monthly revenue and capped at 20% — the ceiling we pre-qualify to. This is the one that binds: two advances already running leaves less room than none, however good the rest looks.

already committedroom left
020% of monthly revenue

The split shown is an example, not your file. Yours is read by a person, from your own statements.

The whole method, on one page →

Asking for the right amount

For a stock buy, ask for the cost of the stock. Tying the number to a purchase order rather than to a round figure is the difference between an offer and a conversation.

Across every trade the anchor is the same: roughly a month of revenue, and never more than the statements support. What you already pay other lenders matters as much as what you are asking for, and you need an average of at least $20,000 a month to qualify at all.

When to ask

Stock money is wanted before the season, which means applying a month earlier than feels necessary. Buying for the fourth quarter is a summer decision.

Have these ready as well

On top of the standard file — six months of statements, your incorporation documents, your CRA business number and photo ID.

  • Payout statements or reports from each platform you sell on
  • Bank statements for every account those payouts land in
  • A supplier quote or purchase order, for a stock buy
  • The lease, for a fit-out or a new storefront
The standard file, in detail →What your province calls its incorporation papers →

What usually fits

In this order, more often than not — though the file decides, not the trade.

Revenue-based line of credit

Draw what you need, pay for what you draw, and the limit moves with your revenue. For months that are uneven, not short.

Up to $500,000

Term loans

A fixed amount, a fixed schedule, and nothing pledged against it. The straightest answer when you know the number and the timeline.

$5,000 – $2,000,000

Asset-based lending

Your receivables, inventory or equipment doing some work while you still hold them. Security usually prices better than an unsecured facility.

$50,000 – $2,000,000

See what you qualify forAbout ten minutes · no hard credit pull

Where these files get harder

None of these is an automatic no. They are the things that turn a one-day decision into a conversation, and all of them are better said by you than found by an underwriter.

  • Revenue spread across platforms and accounts with only some of them sent
  • A season of revenue sitting on one platform that pays out on a rolling hold
  • Deep seasonality with no contracted or recurring revenue underneath it
The funding step of a Spark application: an amount entered, and a one-line box saying what the money is for.

Any of these is one sentence in the box that asks what the money is for.

Said on the way in it costs you nothing. Found in the statements by somebody who then has to ask, it costs a day.

Questions

No, as long as both sides are in the file. Platform payouts are read the same way as terminal settlements.

Still deciding? Talk to a specialist — no application required.

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Other trades

See what you qualify for.

About ten minutes, most of it finding your statements. Applying never touches your credit score.

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