No industry is more competitive than retail. And, by and large, national brands hold a monopoly. For independent retailers, ‘picking up the scraps’ is a genuine business model unless they can differentiate themselves and carve out their own unique selling point, and a brand, that attracts customers.
Boutique coffee shops operate a prime example of a retail model that is sustainable in the face of big brands like Starbucks and Costa. They attract their own customers by delivering a higher quality coffee. Barbershops are another good example. They survive on the high street, in the face of brands like Toni & Guy, generally because of the experience they offer – better music, great cuts and perhaps a beer while you wait.
In fact, most retail businesses, whatever they’re selling, can stand out on the high street and survive the presence of big brands. The trick is investing in the right areas that allow the business to deliver a unique service.
How retail finance can help
One of the biggest issues retailers face is investing in themselves. Money can quickly become tied up in stock. Over time, it is common for independent retailers to have little cash in the bank but an enormous list of assets. This is an issue because it leaves very little for investment – and sometimes nothing at all.
Whether you want to expand the front of your coffee shop to accommodate more customers during the summer, or invest in fancy polished plaster for your walls to make your handbag store more upmarket, retail finance can make it happen.
Finance is available for both established retailers and retail start-ups. The amount you can borrow depends on your ability to pay it back. An independent lender, such as Nationwide Corporate Finance, will lend up to £500k to retailers. All retailers need to apply is a business plan, finance details, and owners who are responsible.
Where is the best place to get finance?
This is the golden question. Many business owners approach their high-street bank for a loan but are turned down out of hand. It should be said that high-street banks look for one big thing when lending to a business – security. They want something of value to guarantee your loan against, irrespective of your finances.
Independent lenders approve more applications than high-street banks and offer finance solutions of the same quality. The interest rates are usually lower and some lenders, such as Nationwide Corporate Finance, don’t charge an early settlement fee. This gives you the flexibility to repay your loan early without penalty.
Perhaps the biggest appeal of retail finance is that it’s measurable. With a loan of this type, you make monthly repayments of a prearranged amount over a set term. For independent retailers, this clarity in cost translates to a stress-free financial product.
Contributor: Nationwide Corporate Finance