Small Business Loans for Pet Shop

By 2023, it's expected that the pet care industry will be worth $281 billion. Whether you own a bricks and mortar location or your business is online, the pet industry stays strong.

Fast SBA Loans • Pre-Qualify in Minutes

Lack of proper financing and adequate working capital are the main reasons a pet shop owner is likely to struggle to achieve financial success. Small business loans for pet shop owners can provide financial assistance for both immediate and future needs. Funds from the small business loan can assist you in expanding your business through hiring and staff training, purchasing inventory, refinancing existing high-interest debt, and much more.

This guide explores several small business loan options available to those in the pet industry, explains how they work, and discusses the pros and cons of each.

When should I consider getting a business loan?

There are many ways funds from a business loan can be used to shore up your business. If you need money for the following, it’s a good time to seek funding.

  • Payroll expenses and miscellaneous fees.
  • Purchasing essential, often costly products for your store like holistic foods and treats or specialty products.
  • Inventory or stock purchases in preparation for peak seasons, such as holidays.
  • Store expansion or purchase of real estate for new and/or secondary locations.
  • Equipment for small business pet stores that want to expand into grooming, bathing, training, and doggy day care services.
  • Marketing and advertising costs that play a major role for small pet stores competing against the large, name brand stores.

Financing Options for Established Pet Industry Businesses

If you need funds for inventory, working capital, hiring or more, there are lots of options. Some are fast, others take more time, some are costly and others offer low-cost funds.

So where do you turn for funds? Here are options available for small businesses.

SBA Loans

If you qualify, the Small Business Administration’s low-cost loan programs can be your best option. SBA 7(a) loans have low rates, long terms and very low payments to fuel stability, growth and savings.

There are three types of SBA loan programs available for business owners, the 7(a) Loan Program, the CDC/504 Loan Program and the Microloan Program.

The 7(a) Loan Program

An SBA 7(a) loan can be used for a variety of purposes.

  • Working Capital – Purchase equipment, increase inventory, add marketing programs, for operating expenses to hire additional staff. For additional information, read What is Working Capital in Small Business.
  • Debt Consolidation Loans – Refinance merchant cash advances, short-term business loans, high interest business loans, daily or weekly payment loans or business credit cards. Learn more here: Refinance Your Business Debt by Learning More About Refinancing.
  • Commercial Real Estate – Refinance an existing commercial real estate mortgage, buy a bricks and mortar building or other owner-occupied commercial space. Learn more here: Commercial Real Estate Loans.

For in-depth information about the popular SBA 7(a) loan program, visit the SmartBiz Small Business Blog and review our comprehensive article: What is an SBA Loan?

The 504 Loan Program

This program was created to give small businesses low cost funds for expansion or modernization. Typically, up to 50% of project costs are funded by a lender backed by the SBA. CDCs (Community Development Corporations) usually fund up to 40% of the project cost. The final 10% is a cash down payment expected to come from the small business owner. A 504 SBA loan might be a good fit for small business owners interested in purchasing a commercial real estate property and if their unique business circumstances fit with the public policy goals of your local CDC.

The Microloan Program

The Microloan Program is for very small businesses, including start-ups and provides loans of up to $50,000. Requirements to qualify for a microloan can vary depending on the lender. Proceeds from an SBA Microloan can be used for most business expenses but not for paying down debt or real estate purchases.

There are plenty of non-SBA loan options available although they may have higher rates, shorter terms and larger payments.


Business Lines of Credit

A business line of credit allows you to borrow funds up to a limit based on your credit, typically smaller than a term loan. You only pay interest on the amount you use, and you can continue borrowing as necessary until you reach the set maximum. These loans are usually unsecured, meaning that you won’t have to provide collateral to qualify. For in-depth information, read this post from the SmartBiz Blog: Small Business Lines of Credit Pros and Cons.

Business credit cards are revolving lines of credit. The main distinction is that they don’t terminate once the predetermined limit is reached. They work like personal credit cards, with varying spending rewards and offers depending on the lender. Learn more here: 5 Business Credit Card Myths.

Merchant Cash Advances

A merchant cash advance (MCA) is most often used by small businesses that accept credit and debit card sales. You receive a specific sum in advance that is repaid either by a percent deduction from daily transactions or through daily or weekly payments.

Keep in mind that MCAs often lead to extremely high annual percentage rates. Even the minimum within the range can be several times larger than term loan annual percentage rates and can reach up to well over 300%. For more info, read What You Need to Know About an MCA.

Bank Term Loans

If your business needs funds more quickly than an SBA loan, consider applying for a bank term loan. SmartBiz currently offers term loans through its bank partners for working capital, debt refinance and new equipment purchase:

  • $30,000 to $250,000 loan amounts
  • 2 – 5 year repayment terms
  • Fixed interest rate*
  • Monthly repayments
  • No pre-payment penalties

*Interest rate depends on loan term and the applicant's credit and financial profile.

Learn more here about Bank Term loans available through the SmartBiz bank network: Bank Term Loans.

How to apply for loan

When you find a lender, several important financial documents will be required. It’s a good idea to work with an accountant or bookkeeper to help you gather paperwork. Note that if you have strong credit scores, you’ll be able to get a lower cost loan faster.

Documents required

  • Business tax returns (3 years)
  • Income statements (year-to-date)
  • Balance sheets (year-to-date)
  • Schedule of liabilities (list of all business debt)
  • Personal tax returns (3 years)
  • Personal financial statement

Loan application tips

Protect your credit score

Don’t put in multiple applications as your credit could lower with each inquiry. Find a lender who does an initial “soft pull”, also called a “soft inquiry” of credit. Bad credit can sink your chances to qualify for low cost funding. For information on this, read Hard and Soft Pulls of Credit: What you Need to Know.

Work with a lender who values transparency

Unfortunately, not all small business lenders are on the up-and-up. Confusing language and calculations can result in paying much more than you think you signed up for. Make sure you work with a financial professional who is responsive and answers all questions clearly. Stellar customer service is key.

Questions to ask when comparing financing options:

How much do I want to borrow?

Take a look at your business plan to determine where you currently stand and where you want to go. Create financial goals and speak with your accountant to nail down an amount. Look at the cost of the loan and all fees to get the true cost.

When would I like to repay the loan?

Long term loans generally have the lowest rates and 10 years or more to pay off. If you’re in it for the long haul, long term is best. If you plan on early payoff, check with your lender about penalties.

Business Stories

Here are real SmartBiz customers who work in the pet industry and received funding from banks in the SmartBiz network. Learn how they are growing and saving money with an infusion of funds.


Bristly Business Story

After losing a beloved childhood pet, this creative entrepreneur designed a chew toy to combat dental disease.


Customer Success Story: earthdog

This husband and wife team hand makes dog collars and other accessories out of unique, environmental materials.


Puppy Love, Inc

A married wanted to open a recession-proof business. They took the entrepreneurial leap in 2014 to open the full service pet salon and animal products retail store. Read how they plan to expand with help from a SmartBiz SBA loan.


Instinct Dog Behavior & Training LLC

The owners of this training center report: “We went into business ownership with confidence - you don’t know what you don’t know.” See how they’re successfully growing after a few tough years.

 What you need to know: The information provided through SmartBiz® University and the articles contained therein are for educational purposes only. Use of this information is not a replacement for personal, professional advice or assistance regarding your finances or credit history.