For small business owners in the retail space, Christmas truly does come in July. That’s because midsummer is about the time they need to start preparing their businesses for the holiday season, which, for most people, includes Halloween, Black Friday, Christmas, Hannukah, Kwanzaa and New Year’s. This preparation takes intricate planning and often involves offering sales discounts, bundling certain products at a discount, creating promotional materials and making temporary changes to your website.    

The time between October and the end of December is critical for sales and marketing promotions. Many small businesses — especially retailers — rely on holiday sales from this period to keep their businesses running throughout the year. So how can small business retailers prepare for the holidays? It starts with taking several steps to maximize sales, all of which must be planned well in advance.  

Analyze Past Performance 

Whether you sell candles, customized clothing or home goods, if you’re a small business owner in the retail space, the first thing you should do is examine your sales during past holiday seasons. Focus on which products performed the best, which marketing strategies produced the best results, consumer buying patterns and which product packaging was the most successful. Doing this can help you zero in on the best strategies and products to offer to your customers. 

Get Your Finances in Order 

Prepare your cash flow to handle the extra costs of preparing for the holiday season. These expenses may include increased inventory, extra staff and changes to your website, and more. You may have to tap into your business savings account to cover these costs. If you don’t have enough cash to finance these costs, consider financing. Here are a few common financing options to choose from: 

1. Business loan — A lump sum of cash that you agree to pay back in fixed monthly installments at a pre-agreed upon interest rate. This type of financing typically offers the best interest rate, but the repayment terms can be quite rigid. You do, however, have the option to pay off the loan early. 

1. Business line of credit — A line of credit that you can borrow against at any time for any reason. You only pay interest on the amount that you draw. The repayment terms may require a balloon payment or full repayment of the entire amount owed at various intervals.  

1. Revenue-based financing — This is only offered by online (alternative) lenders. In this case, a lender gives you a lump sum of cash in exchange for a percentage of your future sales until the lump sum of cash plus a fee is paid back. While this is often a more expensive form of financing than a business line of credit or a business loan, it often comes with fewer requirements.  

1. Purchase order financing —This arrangement allows you to borrow money to pay your suppliers upfront for the inventory you need to meet customer orders. This type of financing typically has looser application requirements and can often be obtained more quickly than a business loan. 

Whether you’re tapping your business savings or securing financing to prepare for the holiday season, it’s important to do so early. That way, you’ll be ready to execute your holiday sales strategy quickly. 

>>More: Improve Your Cash Flow With Business Loans 

Plan Your Holiday Marketing Strategy 

Once you’ve identified which products are likely to perform best during the holiday season, begin planning discounts and product bundles that will make your customers feel like they’re getting a bargain. Some things you can offer are: 

• Exclusive sales and discounts on best-selling items. 

• Product bundles for each holiday. These bundles should be promoted as sales or limited-time offers, letting consumers know that they’ll save money by purchasing the bundle rather than buying each product individually. 

• A clear promotional strategy. Use your social media channels and consider advertising in your local community to spread the word. By planning ahead, you can be ready to launch your holiday promotions quickly.  

Optimize Your Website 

You would hate to miss out on sales because your website doesn’t show up in Google search results. Retail businesses have come to rely on online sales more heavily, especially since the COVID-19 pandemic and the rise in popularity of platforms like Amazon, which many consumers turn to for holiday shopping. While updating your website — especially if you use a professional website designer —can be costly, it’s often well worth the investment.  

Decorate your website for each holiday you want to focus on, and make sure your site emphasizes your most popular products, as well as exclusive discounts and sales.   

Planning your business website updates in advance of each holiday will ensure that you’re ready to launch without delays.  

Staff Up 

To meet the onslaught of customer demand during the holiday season, you may need to hire and train additional staff. Plan ahead by expanding your payroll and developing a training strategy. Determine how many additional employees you’ll need and what to look for when choosing them, as well as what they’re pay should be. When training new employees, make sure they are equipped to provide high-quality, consistent customer service to both new and returning customers.  

Order Inventory Before It’s Too Late 

One of the most important steps to preparing for the holiday season is getting your inventory ready so that you can meet customer demand for your best-selling products. A good first step is to order your inventory as early as possible once you’ve identified your best-selling products. If you order your inventory late in the season, you might find it to be more expensive, or you may find it’s unavailable given the supply chain challenges and tariff-related disruptions.  

Another helpful strategy is to invest in inventory management software. This type of software can assist you with managing your warehouse and automate tasks such as reordering, inventory tracking and inventory counting so you don’t have to track your stock. Automating these processes can save you time and money, especially during the busy holiday rush.  

If your current cash flow doesn’t allow you to buy all the inventory you need right away, purchase order financing may be a smart option. It can help you to get the inventory you need to meet the high demand you’ll be facing during the holidays.  

The Sooner You Start, the Better 

Planning your retail store for the holidays is kind of like planning your holiday shopping: it requires many steps and early planning. It’s important to start planning as early as mid-summer or even sooner. Start thinking now about the products and sales promotions you’re going to offer, as well as updating your website to reflect each individual holiday. Financing may be necessary to prepare, as you’ll be facing extra expenses.  

The earlier you begin, the better positioned your business will be to maximize sales and reduce last-minute stress. 

Updated Aug. 11, 2025

Recently enacted tariffs have roiled financial markets and caused significant challenges for small businesses that rely on imported goods to keep their companies going. Carefully planned financing, however, can be a great tool to help small business owners navigate these uncertain times.  

Most Recent Tariff Updates & Moves

As of July 23, 2025, some of the proposed tariffs that could affect U.S. small businesses the most are: 

• A baseline 10% tariff on all foreign goods remains in place, although the U.S. has threatened to increase that number if countries don’t negotiate trade deals by Aug. 1. 

• The U.S. imposed a 25% tariff on all goods from Mexico on Aug. 7 with room to negotiate a new trade agreement.  Mexico’s main exports to the U.S. include agricultural products, vehicles, machinery, medical devices and mineral fuels. 

• The U.S. slapped a 35% tariff on all Canadian goods imported into the U.S. on Aug. 7 with room to still negotiate a new deal. Canada is the second-largest trading partner with the U.S. It’s exports to the U.S. include vehicles and vehicle parts, crude oil, natural gas and lumber. 

• The U.S. has imposed a 30% tariff on all goods from China with room to negotiate a trade deal. The U.S. currently imports a wide variety of goods from China, including electronics, computer parts, home goods, furniture, textiles and toys.  

• On July 27, 2025, the U.S. and the European Union announced a trade agreement that will see a 15% tariff on most goods coming from member countries into the U.S., including automobiles and chips.Some goods will be excluded, including airplanes and plan parts, and some pharmaceuticals. The EU has also promised that it will purchase vast amounts of military equipment from the U.S. as well as $750 billion in energy purchases. Currently, the largest EU imports into the U.S. include pharmaceutical products, medical appliances, industrial machinery, aircraft and automobiles. 

• President Trump expressed anger over what he calls Brazil’s unfair trade practices and political motivations and has imposed a 50% tariff on goods from Brazil, which include oil, iron and steel, agricultural products and machinery.  

• Although the U.S. and South Korea had a free trade agreement, the U.S. slapped a 15% tariff on goods being imported from the country and effective Aug. 7 with room to still negotiate. South Korea’s main exports to the U.S. are semiconductors, vehicles, consumer electronics, appliances and machinery. 
• On Aug. 7 the U.S. imposed a 50% tariff on goods from India over anger that the country is buying oil from Russia, which is still embroiled in its war with Ukraine. India’s main exports to the U.S. include diamonds, precious stones, metals, and pearls, as well as machinery, pharmaceutical products, and textiles

How Financing Can Help with Tariff Changes 

Tariff policies can change quickly, leaving small business owners with lingering uncertainty and anxiety. Fortunately, there are various financing options that can help you manage your cash flow, stock up on inventory, and keep your business running during these turbulent economic times. 

 A Business Line of Credit 

When your small business is facing uncertain times, you’ll likely want a financing option that offers speed, flexibility and control over how much you can borrow and how you repay it. One of the most adaptable financing tools available is a business line of credit.  

If you qualify, a business line of credit gives you a predetermined line of credit that you can draw from whenever needed for the duration of your agreement — and you only pay interest on the amount you’ve used. One of the key advantages of a line of credit is that when you draw on it, you don’t have to justify to a lender what you are using the money for, unlike some other financing options. You can use the money for any business expenses you may need to meet, especially when times are uncertain.  

This includes adding to your inventory, making operational upgrades or increasing your marketing budget. 

MORE >> See if you qualify for a business line of credit with a quick application 

Revenue-Based Financing  

Revenue-based financing can be a valuable tool to help your business stay afloat during tough economic times, especially if your business has a strong sales history. While it tends to be more expensive than other types of financing, revenue-based financing can help stabilize your cash flow and keep your business going when uncertainty is high, such as during periods of rising costs due to tariffs.  

If you’re confident that your customer base will remain loyal even after price increases, a revenue-based financing arrangement allows you to access a lump sum of cash upfront in exchange for a percentage of your future revenue over a predetermined period. For example, let’s say you receive $100,000 through a financing deal with a fee of 20%. That means you agree to pay back $120,000 over time by sending 20% of sales to the financing company on a daily, weekly, or monthly basis. There’s no set end date for the payments; they simply continue until the full amount is paid off.   

Unlike a traditional small business loan with fixed monthly payments, revenue-based financing is more flexible. If sales slow, the percentage stays the same, but the actual payment amount goes down too, since it’s tied to how much the business is making. It’s a way of “borrowing” that adjusts with your cash flow. The money you receive upfront can help you with marketing, growth and making the necessary adjustments to your small business to handle higher prices.    

Equipment Financing 

If your small business relies on heavy machinery to operate and you’re worried about rising equipment costs due to tariffs, equipment financing could be a good solution for your business. Equipment financing is essentially a loan from a third-party lender to help you purchase the equipment your business needs, whether it’s a CNC processing machine, a tractor/trailer or even office computers and furniture. As long as it’s not real estate, equipment financing can be used by qualifying businesses to purchase just about any type of equipment. 

If your credit rating isn’t quite strong enough for a loan from the dealer, or if you can’t afford a down payment, equipment financing can help you secure the money you need — often with an affordable interest rate — so you can lock in today’s equipment prices and keep your business running. With tariffs creating uncertainty in the market and the possibility of rising interest rates if inflation kicks in, financing your equipment now could be an easy way for you to protect your business from future cost increases. 

SBA 504/CDC Loan 

If you’re seeking additional working capital to handle the economic uncertainty caused by tariffs, the Small Business Administration (SBA) 504 loan program may be a good option. These loans are designed to assist small businesses — especially those in underserved communities — with creating jobs, renovating their storefronts and purchasing equipment and other fixed assets. Any type of business with a physical location is eligible to apply. 

504 loans are backed by the SBA and are granted by certified development corporations (CDCs). They are generally easier to obtain than an SBA-backed 7(a) loan and tend to carry a lower interest rate than most commercial loans. A 504 loan can be a great way for your small business to obtain working capital as it navigates the challenges posed by tariffs.  

Explain Rising Prices 

If you do need to raise your prices because of ongoing trade wars and rising costs, be sure to clearly and honestly communicate to your customers beforehand why you are doing so. This can be done through emails, text or on your small business’ website and social media platforms. Additionally, keep an eye on how your larger competitors are responding. If they are also increasing prices due to tariff-related uncertainty, carefully monitor how much of a price hike customers are willing to tolerate.  

MORE >> Raising Your Prices to Combat Inflation 

Get Creative in Keeping Costs Low 

Another action you can take if trade wars are forcing you to hike prices is cutting your overhead where you can. This could include everything from reducing utility expenses to adjusting staffing levels. Additionally, get creative with your product offerings. If you’re forced to raise the prices of your products, try offering discounted product bundles to your customers. Consumers are always attracted to a sale or discount.  

Additionally, while it may be difficult to do so, explore the possibility of sourcing or manufacturing your products in the U.S. If applicable, explore whether you can get raw materials or finished goods from domestic suppliers rather than importing them from overseas. This could include food products, cotton or machinery and equipment.  

Bottom Line 

The threat of trade wars and rising tariffs has created a tremendous amount of economic anxiety and uncertainty for small businesses, especially those dependent on imports. Exploring the use of various financing tools and using them in a targeted way can help relieve the stress tariffs place on the cost of goods and keep your business running. Whether it’s managing cash flow, locking in equipment prices, adapting your pricing strategy or getting creative with your operational costs, the right tools can help your business survive.  

Your small business has not only survived its first two years, but it’s also thrived, thanks to your hard work and dedication. Now that your business has a few prosperous years behind it, the good news is that you may be eligible for financing from either banks or alternative lenders.   

This means you no longer have to rely on personal assets, high-interest credit cards or loans that involve a personal risk — such as a home equity loan — to support your business. With access to lower interest rate financing now available, you have the opportunity to obtain the financing you need for your business.  

A small business loan can enable you to grow your business by funding the purchase of new equipment, acquiring another business, hiring new or additional employees, or expanding your space and inventory. There are several options to consider when choosing your first business loan and lender. Different types of financing serve different purposes, so it’s important to understand your options before applying for a loan. 

Where Do I Apply for a Small Business Loan? 

If you’re new to small business financing, the first thing to know is that the main types of lenders that offer small business loans are traditional banks, credit unions and alternative (online) lenders. Each has its own advantages and drawbacks, depending on specific factors such as your FICO score, business credit rating, how quickly you need funding and how much financing you need.  

• Traditional banks and credit unions include local banks and branches of larger financial institutions with brick-and-mortar locations. They offer face-to-face service with small business lending officers and often offer loans with lower interest rates than alternative lenders. However, to qualify for a loan, these institutions typically require an excellent credit score and more paperwork than an alternative lender. In some cases, even once you’ve been approved for financing, it can take longer to receive the funding.  

• Alternative lenders operate almost exclusively online and generally charge higher interest rates on loans and other financing products than traditional banks and credit unions. However, what you get with an alternative lender is convenience — they typically accept lower credit scores, require less paperwork and provide quicker access to funding once you’ve been approved. Over the past decade and a half, alternative lenders have become well-established and reputable sources of small business financing. 

More >> Traditional Bank vs. Alternative Lender – Which is Better for Your Business? 

What Steps Should You Take Before Applying for a Business Loan? 

When applying for a business loan — especially if it’s your first — it’s important to evaluate key factors about your business to gauge your chances of approval. Banks, credit unions and alternative lenders will all assess the risk of default when considering whether to grant you a loan or another financing product. Being well prepared can make the process smoother and increase your likelihood of success. Here are five steps to take to prepare for a business loan application. 

1. Check and Improve Your Credit Rating 

Both your FICO and business credit scores are among the most important indicators lenders will look at when deciding whether to give you financing. You can check your FICO score for free through any of the three major credit bureaus — Experian, Equifax and TransUnion. To check your business credit score, use the leading business credit bureau Dun & Bradstreet. 

If your scores aren’t where they need to be, consider taking the following steps: 

• Ensuring you have at least six months of on-time payments towards any outstanding debt.  

• Taking out (but not using) a business or personal credit card to increase your debt-to-credit ratio. Keep in mind, though, that this strategy can take several months to positively affect your credit score, and a new credit inquiry could cause a temporary dip in your credit score. 

• Requesting trade references from your suppliers if your small business regularly purchases inventory.  

More >> How to Build your Business Credit in 7 Steps   

2. Define Your Reason for Taking a Loan 

When applying for any type of term loan, including US Small Business Administration (SBA) 7(a) loans, it’s essential to clearly state how you plan to use the loan to increase your revenue. It could be that you want to grow your business by hiring additional staff, opening a new location, acquiring a similar business or developing and marketing a new product. Lenders want to know that the loan will be used for legitimate business purposes that will help you repay it.  

3. Get Your Paperwork in Order 

Lenders will require you to present documents to prove your identity and confirm your business exists. This includes government-issued identification, Social Security number, tax returns and identification and documents proving that your business is registered as an LLC, S-, L- or C-Corp. Lenders will also want to review your business’ financial statements, such as recent bank records.  

4. Ensure You Have a Strong Cash Flow 

Lenders will assess your ability to pay back a loan by examining your business’ cash flow, which is essentially your business’ income minus its expenses. Having a consistent, positive cash flow is often crucial in getting approved for most types of finances, as that shows lenders that you have the ability to meet repayment terms. If you have periods of negative cash flow, you may want to hold off on applying for financing until you can demonstrate that your business is consistently turning a profit.  

More >> How to Check Your Business Credit Score 

5. Ensure You Have Adequate Revenue 

Most traditional banks, credit unions and alternative lenders require a minimum annual revenue before considering your business for financing. It’s important to make sure your business has reached an adequate size before applying for your first loan. Some lenders require as little as $250,000 in annual revenue. 

More >> Small Business Loan Application Checklist  

What are the Types of First Time Loans? 

First time small business borrowers often consider bank loans as their first option when it comes to borrowing. While a bank loan might seem like an obvious choice, several other loan types may better suit your specific needs. Here’s an overview of the most common loan options:

• SBA 7(a) Loan: This is a term loan offered by authorized lenders and guaranteed, in part, by the SBA. Like any term loan, an SBA 7(a) loan will provide you with a lump sum to be paid back over time at a fixed interest rate. This type of loan often offers a lower interest rate than a conventional bank loan. The size of SBA 7(a) loans varies. While they can be up to $5 million for well-established small businesses, the average size of an SBA 7(a) loan in 2024 was $443,000.  

Securing an SBA 7(a) loan can be challenging, however, due to its complicated application process and strict requirements. Applicants typically need a FICO score of 680–700, a business credit score of at least 80, a strong business plan, and a favorable business location. Additionally, if approved, funding for the loan can take several weeks.  

• Bank Loan: This is a term loan that typically charges interest rates than a SBA 7(a) loan. Traditional banks and credit unions often charge lower rates than alternative lenders but may have more requirements, including a business plan and, if your credit score is less than excellent, collateral or a personal guarantee. Alternative lenders, while charging slightly higher rates, usually require far less paperwork and accept lower credit scores — typically a 650–680 FICO score and a business credit score of 70. With an alternative lender, you can also receive your funds in as little as 24 hours. 
  More >> How can a loan improve your business?  

• A Business Line of Credit: A business line of credit is technically not a loan, rather, it is a flexible financing tool offered by traditional banks, credit unions and alternative lenders. A line of credit offers your business a pre-established credit limit that you can spend on whatever business needs you see fit. If you’re a first-time borrower, a business line of credit offers flexible funding to help manage your cash flow and cover expenses, such as payroll, adding new office equipment or renovating your business space.  

To qualify, you typically require a good credit rating. Interest rates are usually much lower than with credit cards, and you’ll only pay interest on what you draw. But it’s important to note that a business line of credit is not the same thing as a credit card. Unlike credits cards, a business line of credit won’t allow you to keep revolving debt for an indefinite period of time. A line of credit has an initial end date, and in some instances, the amount drawn must be paid back in full.  

A business line of credit can be either secured or unsecured, and different lenders have different eligibility requirements. Speak to your potential lender to understand the specific requirements and terms for obtaining a business line of credit. 

More >> How can a business line of credit help your small business?  

• Equipment Financing or Leasing: If you’re borrowing for the first time and need a new piece of equipment (including a vehicle) to maintain or grow your business but lack the funds for a down payment or don’t qualify for dealer financing, equipment financing could be a good solution for you. For example, if you own an agricultural business and need a new tractor or other manufacturing equipment, an equipment financing arrangement provides a lump sum to purchase the equipment. You then repay the amount over a period of time at a predetermined interest rate that largely depends on your credit score.  

Equipment financing usually requires a slightly lower credit score than a bank loan or line of credit, since the equipment itself serves as collateral on the loan. In contrast, equipment leasing involves paying a set amount at regular intervals for the use of an expensive piece of equipment. Unlike equipment financing, you don’t actually own the equipment; however, leasing offers the flexibility to upgrade to a newer piece of equipment at certain times.  

More >> Explore how equipment financing can help your small business 

• Purchase Order Financing: If your growing business lands its first large contract and you need to acquire a lot of inventory quickly but don’t have the cash to pay for it, purchase order financing could be an excellent option. With purchase order financing, a lender will pay your suppliers to complete an order, and the supplier, in turn, pays you for the transaction discount and other costs. In short, this type of financing can ensure that your customers get the merchandise they are purchasing and that you get the profits from that purchase. 

Scrutinize the Terms of Your Loan 

Each lender has slightly different requirements, terms and fees. If you’ve been approved for a loan or other type of financing product, it is crucial that you carefully review the terms before signing on the dotted line. This includes looking at the details of the interest or fee that you’ll be paying, processing fees and repayment terms. These details will help you determine whether you can afford the loan.