Retail Businesses: Preparing for a Big Sales Push

September 27, 2018 by CNH Finance, LP in category “Financing”

As we near the end of September, retail businesses are preparing for big sales opportunities in the upcoming months. To maximize customer turnout and boost sales, retail businesses need to stock up and diversify their inventory, roll out marketing campaigns, and even hire additional staff. Preparing for a big sales push requires capital, and debt-based financing may not be the answer.

Retail Businesses Should Avoid Debt

In the retail industry, taking out short-term loans to prepare for big sales periods is a losing battle. Loans provide a finite amount of working capital, along with debt, stringent terms, and interest rates which are subject to arbitrary increases. With multiple and consecutive sales periods some multiple short-term loans, and the interest can really eat into revenue because the debt will have to be paid off for months or years following the sale. How are retail businesses supposed to get ahead with liabilities like that placing such a burden on cash flow?

A Better Alternative to Loans

Instead of taking out loans to prepare for big sales periods, retail businesses use asset based financing. Asset based financing provides a line of credit structured around inventory, vehicles, property, and other fixed assets. The line of credit is revolving, meaning retail businesses can draw on financing as needed, and then repay the balance. Once the balance is repaid, the line of credit is replenished and can be drawn upon again. Asset based lines of credit are debt-free and have no stipulations. Businesses can use asset based financing to restock inventory, hire seasonal staff, run targeted marketing campaigns, or anything else needed to maximize sales. Retail businesses don’t have to worry about impacted credit ratings, debt, or liabilities that severely eat into cash flow for the months following the big sales push.

Growing Your Retail Business

Asset based lines of credit help retail businesses grow beyond the big sales. As retail establishments get more sales, purchase better equipment, and bulk up inventory, the amount available through the line of credit also increases. Asset based financing – unlike debt-based loans – is the only funding which promotes growth and gives businesses the advantages they need to move ahead of those burdened by debt.

CNH Finance offers the most comprehensive asset based lines of credit for retail businesses. If you are making plans for big sales in the upcoming months, and need a reliable and renewable source of working capital without debt, contact our offices.

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