Retail Business Funding
Stock, Refits and Expansion

Premises and fit-out are the most straightforward retail lending: a shop's freehold is familiar security for a commercial mortgage lender, and fixed units on a shopfitter's invoice can go to an asset lender.

Where shops get squeezed is the shape of the year rather than the size of the takings. Stock is bought in August and sold in December, so the cash goes out four months before it comes back. A term loan is repaid in equal monthly instalments, the same in February as in December. A revolving facility is drawn and repaid as needed. Lenders on our panel offer both, and which one a shop uses is its own decision.

Two criteria decide most shop cases before pricing is discussed: whether a director owns a home, and how long the shop has traded. Neither is on any lender's homepage. Both are checked against each lender's published criteria before an application is made.

Size moves the price. A £10,000 loan takes much the same work to underwrite as a £50,000 one, so small borrowing is dearer borrowing, which is the opposite of what most shop owners expect.

Most shops reach for what is already in the drawer. On the British Business Bank's figures, 19% of smaller businesses use credit cards and 16% use an overdraft, against 12% using leasing or hire purchase. Cards and overdrafts are the facilities most businesses already have in place.

Asset finance and a general-purpose loan are assessed differently. In asset finance the kit is the security, so a lender reads a refrigeration unit or an EPOS system alongside the accounts; a general-purpose loan is read on the accounts and the trading alone.

Retail is not a soft sector to underwrite and the numbers say so. Wholesale and retail accounted for 16% of the 23,942 company insolvencies in England and Wales in 2025. That shows up as a personal guarantee request and a shorter first facility. It is not personal, and it is not a reason to stop asking.

Costs vary by facility and lender. Short-term borrowing is often priced higher than a bank facility, and a bank facility can take eight weeks or more to arrange; which a shop uses is its own decision.

The BRC-KPMG Retail Sales Monitor for the four weeks to 29 August 2026, published on 8 September 2026, put total retail sales 0.7% up on a year earlier, down from 1.3% in July and under the 12-month average of 1.6%; food was up 2.6% and non-food down 0.8%. The BRC-Sensormatic Footfall Monitor for the same month, published on 4 September 2026, had total UK footfall down 1.7% on August 2025, high streets down 3.1%, shopping centres down 0.5% and retail parks up 1%. Neither is a reason not to borrow; both are the context an underwriter reads a shop's statements against.

The ONS counted 2.73 million VAT or PAYE registered businesses in the UK at 14 March 2025 and put wholesale and retail, including motor repair, at 14.5% of them (bulletin of 24 September 2025); it gives no retail-only figure, so we do not quote one. Shops and supermarkets head the gov.uk list of premises qualifying for the retail, hospitality and leisure multipliers from 1 April 2026: 38.2p in the pound under £51,000 rateable value and 43p from £51,000 to £499,999, each 5p below the national equivalent, in place of the 40% relief of 2025/26 (guidance updated 30 March 2026, factsheet updated 30 January 2026, both read 9 September 2026). More than 750,000 properties benefit on the government's count, and the saving belongs in the forecast a lender sees.