Why do banks turn down retail businesses for loans?

Inventory is an asset a bank discounts heavily. Unsold stock is worth what someone will pay for it in a hurry, which is rarely what you paid, so a balance sheet full of it does not read as strength.

The margin compounds the problem. Retail turns a lot of revenue into a little profit, and a bank's model looks at profit.

The timing is the real bind: you buy stock months before the season and get paid across it, so a bank looks at you at exactly the point your cash is lowest and your borrowing need is highest.

Sales are read rather than inferred. Card settlement and deposit history show what actually moves, week by week, which is far better information than a year-old set of accounts.

Buying inventory ahead of a season is a well-understood use of funds, and it is self-liquidating — the stock becomes the revenue that repays it. Funders price that differently from an open-ended cash need.

Repayment moving with revenue matters more in retail than almost anywhere else, because the difference between December and February is not a warning sign, it is the business.

A merchant cash advance against card sales fits stock bought ahead of a selling season, because it is repaid out of the sales that stock produces.

If the need returns every year before the same season and your statements are clean, a line of credit drawn for the build-up and repaid as the stock sells costs less than a new advance each time. Neither is the tool for a store fit-out that pays back over years.

Six months of bank statements and, if you have them, processing statements.

What the stock is and when it sells. A funder pricing a seasonal buy wants to know when the revenue comes back.

Your monthly deposits, including any online channel that settles separately.