Retail Trends Are Promising for Small Business in 2018

These are good times for independent retailers. You have probably seen headlines in the news about retail bankruptcies, store closings and disappearances of familiar brands but consumers have not stopped shopping, they have simply changed their habits. Chain stores are making room for specialty stores and new opportunities are opening up for small retail businesses.

Adaptability is the key to retail success today as consumers habits change. If you own an independent retail business, this is a good time for you to upgrade your facilities to stay on top of your game, or expand to meet increasing consumer demand. The Small Business Administration (SBA) 504 loan, through a Certified Development Company (CDC) like TMC Financing, can help you do that by providing flexible, affordable financing.

The New Retail: Experiential, Hi-Tech and Transparent

Retail openings have been outpacing closings by a healthy margin, with 2.7 companies opening stores for every one that closed. Consumer spending rose 1.1% in the first quarter of the year, as high employment created more disposable income. That is quite moderate growth. The effects of tax reform will begin to be felt in April and they are expected to encourage spending as well.

Analysts point out three major trends in retail currently:

  • the shopping experience is still evolving to become more engaging for the consumer
  • the role of technology in retailing is still growing, and
  • consumers are more concerned about the healthiness and origins of the products they buy.

None of these things are new developments, but they continue to shape the industry. Small business is much better prepared to respond to the changes in the market than the corporate chain stores are, as has become quite apparent.

In addition, retail software creator Vend observes an increasing streamlining of what it calls “chore” shopping. This is buying groceries and other necessities. New options for pickup and delivery are transforming this process by making it shorter and sweeter. Meanwhile, the kind of shopping we enjoy, called “cherish retail” by Vend, is stronger than ever. Here too, technology is making buying easier. Omnichannel marketing, enabling the consumer to make selections and purchases on a variety of electronic devices, is a growing concern for retailers.

Research shows that ecommerce complements brick-and-mortar retail because people go shopping to seek entertainment and human interaction as well as to buy goods. Customer service is becoming ever more elaborate, with curated selections, customization options and other signs of personal attention.

Finally, consumers are showing increasing awareness of the impact of their purchases on their health, the producers of the product and the planet. These issues are referred to collectively as transparency. Consumers are demanding more information about product origins than they once did and favoring environmentally friendly, fairly traded and healthy products.

This dynamic environment provides ample growth opportunities for independent retailers.  You might choose to renovate to stay on the leading edge of the market or might want to open new branches to meet pent-up demand. This is also a good business climate for purchasing your location, in order to enjoy the benefits of ownership, such as increasing the equity in your business and living without rent increases or the threat of displacement.

Expanding Your Retail Business with an SBA 504 Loan

A 504 loan can help increase the prosperity of your retail business in several ways. You can use the financing to buy your premises and creating a more secure future for your business. You can also finance the purchase of a building to serve as a new store, either to replace your current location or as an additional outlet, or purchase land and build a new store. If your store needs remodeling to provide the best customer experience, that is an option for financing too.

The 504 loan makes financing up to $5.5 million available to small businesses at a fixed, below-market rate for a term of 10, 20 or 25 years. The 504 loan is fully amortized, so there are no balloon payments. The loan can be used for the purchase of fixed assets, such as land, buildings and large equipment, or for the improvement of existing buildings. You can also refinance commercial real estate mortgages with a 504 refi loan.

Retailers can tap into consumer transparency concerns by participating in the SBA Green Energy Program. To qualify for the program, a borrower can:

  • Buy or construct a building that consumes 10% less energy than your current location
  • Make upgrades to the building you own to consume 10% less energy, or buy the building you now lease and do so
  • Buy or construct a building that produces 10% of the energy it consumes or that produces fuel to reduce fossil fuel consumption, using equipment financed through the loan

An eligible use of Green Energy funds is the installation of electric vehicle charging stations in parking lots. This is particularly apt for retailers. The Green Energy Program allows you to receive additional project funding (raising the $5 million limit to $5.5 million) and exceed the regular project limit to receive up to a total of $16.5 million in 504 loan funding.

The 504 loan is administered by a nonprofit Certified Development Company (CDC) such as TMC Financing, and loans are granted in conjunction with a conventional lender that provides 50% of the total project cost. Your CDC facilitates the SBA loan for up to 40%, or $5 million ($5.5 million for the Green Energy Program). You provide 10% of the project cost as a down payment. Your CDC will also provide support for your loan for its entire life.

You can find out more about using the 504 loan to expand your retail business from one of TMC Financing’s 504 loan experts. TMC is an SBA Premier Certified Lender, and has funded projects worth more than $9 billion across California and Nevada, resulting in the creation of an estimated 60,000 jobs. With over 35 years of experience, TMC can help you find the financing that is best for you and guide you through the 504 loan process. Contact TMC Financing today.


Barbara Morrison, a local small business advocate and civic leader, founded her first company TMC Financing in 1981. TMC is a Certified Development Company that provides commercial real estate financing to small business owners via the SBA 504 Loan Program. TMC consistently ranks among the top certified development companies nationwide, and has funded projects worth more than $9 billion across California and Nevada. Nearly 5,000 small businesses have benefitted from this financing, resulting in the creation of an estimated 50,000 jobs. TMC is also the No.1 SBA 504 hotel lender in the United States. Barbara is also the founder of Working Solutions, a Bay Area microlender whose mission is to provide micro entrepreneurs, particularly low-income individuals, women and minorities, with the access to capital and resources they need to start a successful business.
Barbara Morrison