Retail Merchant Cash Advance & Business Funding
Retail store funding and the holiday spike in your average.
Retail store funding should be sized for a normal month, not for December. An offer based on an average that includes the holiday spike can set a daily debit the store can't carry in March, so we rebuild the average without the peak.
Who should read this: independent shops, boutiques and specialty retailers, and brokers with retail files.
How does the holiday season distort a retail average?
The holiday season lifts the average because a strong November and December can outweigh several quiet months.
An offer sized on a three-month average that includes December may produce a daily debit the store can't carry in March. We rebuild the average without the peak to show what a normal month supports.
Ecommerce sellers see the same holiday spike through platform payouts, and Convenience stores run steadier all year. Compare other businesses on the Industries overview.
We're not a funder.
We don't fund deals ourselves. We shop yours with funders who do, so you see more than one offer.
Only funders that fit.
Your file goes to funders that work with your industry and your deal size. Nobody else sees it.
You make the call.
Every offer comes to you in writing. Nothing happens until you pick one.
- What it costs to apply
- Nothing. Applying costs you nothing, and Afterfirst MCA charges you no fee.
- Credit
- Ask us how each funder checks credit before you agree to anything.
- Speed
- We call you back and talk with you before your file goes to any funder.
- Offers
- Every offer shows the total payback, the payment amount, how often it comes out, and the term.
When should a retailer take an advance, before or after the holidays?
A retailer usually benefits more from an advance taken before the holidays to buy stock, when the coming sales will support the payment.
Taken after the peak, the same advance is paid from the thinnest months. That is the timing question we raise with every retail owner.
A retailer who took an advance before the season and wants more is shopping a Second position, and the Factor rate guide shows what paying it back in weeks does to the estimated APR.
Inventory spending in retail store funding files
Funders read inventory spending by setting supplier payments against the deposits that follow them.
Heavy buying before a season is normal; heavy buying with no later rise in sales is a warning sign.
Buying stock ahead of the peak
Most shops buy ahead of their peak and pay suppliers before the sales arrive. The statement shows supplier debits climbing a month or two before deposits do.
Clearance sales at the end of a season
Markdowns at season's end bring deposits in at lower margins. A funder reading that month sees volume without much profit behind it.
A boutique paying for spring in winter
A clothing boutique may pay for spring stock in winter, when its sales are thin. The statement looks strained until the new season sells.
Supplier terms that push payments later
If a supplier gives terms, the payment lands later and closer to the sales. Funders see a smoother account when terms are in place.
Naming the season you're buying for
Mention the season you're buying for and when the stock arrives. It tells the funder why supplier debits are rising.
Other debits that stand out
The debits that stand out are wholesale supplier payments, rent, processor fees and any existing advance. Funders also look for chargebacks and returns, which reduce actual deposits after the sale. A spike in returns after the holidays is normal and worth noting.
Retail questions, season by season
Can a store get a merchant cash advance to stock up for the holidays?
Yes, a pre-season inventory buy is one of the more common retail uses. The advance should be collected mostly while the holiday sales come in. Check the estimated term against your selling season.
How do returns affect a retail merchant cash advance?
Returns and chargebacks reduce the actual deposits funders count. A store with high return rates may see a smaller offer. Keep returns in mind when reading your own statement.
Does a second store location help a retail file?
A second location adds deposits if they run through the same business account. Funders may also read each location's account if they are separate. Send statements for every account that belongs to the business.
Sources
Afterfirst is not a funder; all offers are subject to funder underwriting.
Cost, credit, speed and stacking
Cost
Credit
Speed
Stacking
Which months are slowest in this industry?
This table shows how many people private retail trade (NAICS 44-45) businesses employed each month, as an index where the year's average is 100. It comes from the Bureau of Labor Statistics Quarterly Census of Employment and Wages, the most recent full year available. Staffing is a stand-in for how busy a business is. Deposits can move more or less than headcount, so read it as the shape of the year, not your numbers.
| Month | Staffing index (average = 100) | |
|---|---|---|
| January | 100 | |
| February | 99 | lowest |
| March | 99 | |
| April | 99 | |
| May | 100 | |
| June | 100 | |
| July | 100 | |
| August | 100 | |
| September | 99 | |
| October | 100 | |
| November | 102 | |
| December | 102 | highest |
The low point is February at 99 and the high point is December at 102.2, a swing of 3.2 points. Retail staffing climbs in November and December for the holidays.
| Quarter | Total payroll index (average = 100) |
|---|---|
| Quarter 1 | 99 |
| Quarter 2 | 97 |
| Quarter 3 | 98 |
| Quarter 4 | 105 |
Payroll by quarter can rise at year end for reasons like bonuses and overtime, not only more work.
Example: say a business like this deposits $75,000 in an average month and pays a fixed $7,500 a month, 10% of that. If deposits tracked the payroll index, Quarter 2 at 97 would bring in about $72,750, and the same payment would take 10.3% of it. Plan the payment on that quarter, not on Quarter 4 at 105.
Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages.
Which funding options fit retail stores?
Each page runs one option against this industry's slow months.
Second position MCA for retail stores
What a second advance adds on top of the first, and what both payments take from deposits in a slow month.
MCA consolidation for retail stores
One payment in place of two, with the share of deposits before and after in a slow month.
Revenue-based financing for retail stores
A remittance that moves with revenue, so a slow month sends less, and the months to reach the repayment cap.
Business line of credit for retail stores
A draw sized for a slow month, repaid in thirds, with the interest on the balance worked out.
Send one file.
See what fits.
Call 877-FUND-654 with questions.