Grim predictions regarding the imminent death of the High Street have (so far at least) proven to be woefully premature. True, the events of the past few years have radically transformed the way millions of shoppers approach their preferred retail activities. Even so, the High Street continues to play a role of immense importance in the UK’s broader retail landscape and is likely to do so indefinitely.
If anything, now could be the perfect time to consider opening a bricks-and-mortar shop. Demand for retail units remains comparatively low and leasing costs are likewise nowhere near as prohibitive as they used to be. There’s also plenty of flexibility where contractual terms and conditions are concerned, giving smaller businesses and start-ups looking to do so the opportunity to set up stores with minimal risk.
Still, covering the initial costs of opening a new retail store can be problematic for small businesses. Even if you intend to lease (rather than purchase) premises, you still need to cover a broad range of setup costs. Examples of these include upfront rent payments, deposits, renovations, equipment purchases, staffing your store and stocking up on essential inventory.
For smaller businesses with limited cash flow, all of the above can pose a problem. But there are plenty of specialist funding solutions available for these kinds of purposes, which are well within the reach of even the smallest businesses.
If you are looking to transition your small business to a physical presence on the High Street, here are just a few of the funding options available:
Business Loans
Specialist business loans can be issued in the form of secured or unsecured loans, with terms and conditions tailored to meet the requirements of the borrower. An unsecured loan is a viable option only when the total sum of money needed is fairly modest. Secured loans can be taken out with no upper limits on maximum loan amounts, but are only available upon the provision of assets of value as security for the loan. All types of business loans can be repaid gradually, enabling small businesses to spread the costs of their expansion projects.
Asset Finance
The most common type of asset finance is hire purchase (typically abbreviated to HP), which again provides businesses with the opportunity to spread the costs of major purchases over a period of several years. With hire purchase, you pay a deposit to take possession of the equipment and items you need, before repaying the full balance (plus interest) over a series of monthly instalments. The only downside with asset finance is that until the full balance on the facility has been repaid, the equipment purchased remains the property of the loan issuer.
Merchant Cash Advances
A merchant cash advance somewhat blurs the lines between secured loans, unsecured loans, and commercial overdrafts. The facility is technically issued in the form of an unsecured loan, but is nonetheless secured against the value of future card transactions. A sum of money is lent to the business, after which a fixed percentage (typically 10% to 20%) of monthly card payments taken by the business is automatically collected by the lender. This makes it a particularly flexible facility, as the amount you repay is directly tied to your takings.
Small Business Grants
It is always worth checking what kinds of business grants, bursaries and low-interest loans are being offered by the government when planning your new retail project. Depending on the type of business you plan to open and the nature of the services you provide, you may be able to qualify for low-cost funding – perhaps even a government contribution that does not need to be repaid. If you plan on going this route, you will need to pitch your plan to the government as convincingly as possible, complete with plenty of evidence to prove the viability of your business.
