Convenience store finance and loans

By definition, convenience stores are designed to make our lives easier. So we’ve made getting funding for them easier.

No matter if they’re a traditional corner shop, part of a glossy national chain, or big enough to be a mini-supermarket, convenience stores are the places we go when we need something in a hurry. Convenience store financing is much the same thing – funds to help start, buy, expand or operate a convenience store, available with minimum fuss, and often at short notice. 

Read on the find out all you need to know about convenience store finance and loans.

What is convenience store financing?

There are almost 50,000 convenience stores in the UK and they come in all shapes and sizes – from small family-run corner shops to large-scale franchise operations and thousands of petrol station stores. Convenience store financing includes commercial loans, mortgages, and other financial products created to suit the unique nuances of the convenience store industry. Borrowed funds may be used for a variety of purposes:

  • Start a new store
  • Buy an existing store
  • Expand and develop an existing store
  • Shore up working capital
  • Buy into a convenience store franchise chain
  • Pay outstanding VAT

How do these loans work?

Convenience store loans are provided by lenders who service the unique financial demands of the industry. Loans may be offered unsecured, or security in the form of a lien against property or other types of hard asset may be required. Experience in the convenience store industry is not mandatory to obtain a loan, but it may improve the terms and conditions attached to any funding.

What types of convenience store loans are available in the UK?

There are convenience store loans to suit every type of need:

Launch a new convenience store

Launch a new convenience store using the proceeds from a startup loan – this is hard-to-find seed money to get a new business up and running. Government funds may also be available for this type of loan. 

Buy, develop, expand an existing convenience store

Commercial mortgages, development loans and bridging loans may be used to buy, develop or expand an existing convenience store. Pay back over 1 to 30 years. The property acts as security for the loan.

Buy vehicles, plant, and machinery

Asset finance can take the sting out of buying big-ticket business items, such as delivery vehicles and freezers or refrigerators. Buy over time and use the equipment as you pay for the equipment. The asset acts as security for the loan. In many cases, there is no need to provide extra collateral.

Shore up working capital

Working capital loans can be used to pay wages, cover energy bills, buy inventory and more. Depending on the type of loan you choose, added security may be required:

Type of loanDetails
Small business loanWorks like a traditional bank loan. Borrow from £1,000 to £500,000.
Invoice financeRelease the cash tied up in your outstanding customer invoices. Don’t wait 30, 60, 90 days or more.
Revolving line of creditWorks like a bank overdraft. Dip into the available funds as and when you need them. Pay back from incoming revenues.
Merchant cash advanceAll convenience stores accept credit and debit card payments. Borrow against your card sales, the higher they are, the more you can borrow.
Business credit cardsWork like personal credit cards but are held by the business instead of an individual. Usually come with a higher credit limit than personal credit cards. Can be more costly than other forms of small business loan.

Pay VAT 

VAT loans can be used to pay the taxman on time, avoiding penalties and allowing convenience stores to hold on to their available cash much longer. The lender pays HMRC direct. Repay the loan over 3, 6, 9, or 12 months.

Join a convenience store franchise

Buying into a successful convenience store franchise can be a good idea – you become part of a well-known brand, enjoy centralised marketing support, and have easy access to products and equipment. However, joining a major franchise group can be costly, and few franchisors offer funding to soften the financial blow. An independent franchise loan can solve this problem. Borrow from £1,000 to £5million. Repay over months or years. Additional security may be required.

What does corner shop funding cover?

Corner shops may be convenience stores selling last-minute necessities, or they may be specialist retailers such as bakeries, hardware stores, or small fashion boutiques. However, no matter what they sell, corner shops may still access the same type of financing as convenience stores. Use the funds to buy or expand a corner shop, pay for inventory, cover repairs & maintenance, pay taxes, business rates, wages, utilities, and more.

Top tip: The most popular type of corner shop loan is a merchant cash advance. Borrow against the value of your debit/credit card sales. Pay back from future card revenues. Loans may be available in 48 hours or less.

Eligibility requirements for convenience store financing

Are you eligible to apply for convenience store financing? Minimum requirements:

  • +18 years of age
  • Resident in the UK
  • Business trading for at least 6 months (except to start, buy, or expand a convenience store)
  • Convenience store industry experience preferred but not mandatory
  • Good credit preferred, but even if you have bad credit or have been turned down elsewhere it may still be possible to secure the funds you need.

The application process explained

Applications for convenience store loans will typically require some or all of the following:

  • Most recent three-years bank and tax records. (Business account for established businesses,  personal account for new businesses)
  • Cashflow forecast
  • Profit and Loss Statement and recent Balance Sheet. (Established businesses)
  • Details of any existing debt
  • List of major customers and suppliers
  • List of any assets, such as property or inventory
  • Business plan – as detailed as possible. (Only necessary for selected types of loan)

Top Tip: Some lenders may ask for a personal guarantee by the business owners or directors to secure the loan. If they do, they will check their personal credit scores. Don’t get caught out by an error on your credit report, always check your business and personal credit scores before you apply.

How to find the right finance type for your convenience store

There are many types of convenience store loan, with differing rules of application. Individuals and SMEs seeking funds may find themselves forever searching and making applications to lender after lender.

The delays this can create could cause you to lose revenues and leave your business vulnerable to the competition or cause you to lose the shop you wish to buy. Instead, working with a broker, who can access convenience store loans from a wide range of lenders is a better way to go. No more cold calls and endless demands for information, simply tell us what you need and leave the rest to us. 

Get started with Swoop

Get the convenience store loan you need quickly and without the faff. Register with Swoop now. 

Testimonials

Written by

Chris Godfrey

Chris is a freelance copywriter and content creator. He has been active in the marketing, advertising, and publishing industries for more than twenty-five years. Writing for Barclays Bank, Metro Bank, Wells Fargo, ABN Amro, Quidco, Legal and General, Inshur Zego, AIG, Met Life, State Farm, Direct Line, insurers and pension funds, his words have appeared online and in print to inform, entertain and explain the complex world of consumer and business finance and insurance.

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