Funding a new shop or refit: what lenders look at

List the real costs first

Write a simple list: stock for the first month, fit-out and equipment, deposits (rent, energy if asked), licence and council fees, card machine and till, and a buffer for the first few slow weeks. Lenders and landlords take a clear list more seriously than a round number.

Add the money you need to keep back for the first quarter's bills: rent, wages, energy and VAT if you are registered. Many new shops run short not because sales are poor, but because stock and bills arrive before the takings catch up. A small, honest buffer is worth more than an optimistic forecast.

Common routes

Owners' savings and family money are still the most common start. Equipment such as chillers and tills can often be leased or bought on finance instead of paid upfront. Bank loans and overdrafts usually ask for accounts or a business plan.

Funding based on card takings, such as a merchant cash advance, normally needs a few months of card history, so it suits a taken-over shop with existing takings, or a new shop once it has been trading a while. Every option costs money: always compare the total amount repayable, not just the monthly figure.

What helps an application

Keep business and personal money in separate accounts from day one, put card takings through one provider, and keep your lease, licence and ID documents ready. A tidy first few months of statements opens up more options and better terms later.

Buying an existing shop

If you are taking over a shop that already takes card payments, ask the seller for recent card and bank statements as part of the sale. They show real takings and help you plan. Once the shop is trading under your name, your own statements become the evidence funders look at.

Check the stock and equipment list carefully. Equipment on lease or finance may not belong to the seller, and you may need to take over the agreement or replace it.

Keep costs down at the start

The cheapest money is the money you do not need to borrow. Fair card fees, a sensible energy contract from day one and correct business rates relief all reduce how much working capital the shop needs in its first months.

Plan stock carefully for the first weeks: start with fast sellers and grow the range as you learn what your customers buy.

How we help

We look at what the shop needs and how it trades, find funding options that fit, and explain the total cost, the repayments and any fees before you sign. We work with several funders and are paid by the funder. We never pressure you to borrow more than you need.