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How to Finance a Resale Clothing Business

Financing an upscale resale clothing store is easier than you think

If you dream of owning an upscale, resale clothing business, but are unsure about how to begin the financing process, Uptown Cheapskate’s in-house financial adviser will help you every step of the way. As you finalize your business plan and look ahead to your grand opening, you have several options for financing, whether it’s a Small Business Association (SBA) loan, a traditional bank loan or even leveraging your retirement savings to invest in a business instead of the volatile stock market.

Uptown Cheapskate has close to 80 locations throughout the country, and is one of the fastest-growing brands in the $284 billion resale clothing industry. Our team offers world-class support from day one and that begins with financing. Not only will our in-house financial adviser help you secure financing, but they will help you set financial goals once you’re up and running. It’s just one aspect of our ongoing franchisee support.

“Our franchisees aren’t waiting for help because we are proactive in helping. We also help our franchisees learn more about their business on an ongoing basis, including national and regional training sessions. A rising tide lifts all boats, and this philosophy has been tremendous for us,” says Scott Sloan, CEO of Uptown Cheapskate.

If an Uptown Cheapskate franchise sounds like a good fit for you, read on to learn more about the key steps in the financing process.upscale resale clothing franchise

Financing an Uptown Cheapskate Clothing Resale Business has Many Options

Now that you’ve made the decision to bring an Uptown Cheapskate store to your community, there are several financing options. First things first, you need to determine if you meet the financial qualifications, which is the case for any type of franchise. Start-up costs for opening an Uptown Cheapskate range between $301,579 and $491,579 and you would generally need liquid assets of about $75,000. Typically, a bank would expect you to have 10-20% of the total

project cost in capital.

In order to secure a loan you’ll need a healthy credit score(most lenders require a minimum credit score of 640, but the higher the better.) 

Now let’s outline the various finance options available to you:


SBA loans from the U.S. Small Business Administration are probably the most common financing option for new franchisees. About 10 percent of all SBA loans go to franchisees, with the average loan size around $250,000. Because Uptown Cheapskate is SBA registered, SBA lenders with whom we have relationships can fast-track your loan, helping you open your doors as quickly as possible. This is a great option, as SBA financing can cover up to 90% of your initial investment in an Uptown Cheapskate franchise. We will help you determine if you are eligible and qualify for this option based on capital, credit score, and collateral.

These government-backed loans typically have competitive terms and interest rates. You will need several items when you apply, including a business plan, funding amount, credit history, financial projects and possibly collateral, such as your home, car or other property.

Traditional Bank Loan

SBA loans are in high demand so it’s wise to research additional financing options, such as a traditional business loan or line of credit from a traditional bank. Much like the SBA loan, you will still need good credit, a down payment and collateral to apply for a traditional bank loan. As far as traditional bank loans, at Uptown Cheapskate we have taken the stress out of the search process thanks to our relationships with major banks. 

401K Rollover

If you’re not risk-averse, you might consider using money you’ve set aside for retirement to finance your new franchise. The IRS’s Rollover as Business Startup option allows you to withdraw money from your 401K to fund a business venture without facing penalties or taxes. A 401K rollover could be a risky option, however, unless you have a substantial amount set aside in your retirement account.

Home Equity

If you own our home and it has appreciated in value, then a home equity line of credit (HELOC) is a type of second mortgage on your home you can take out in order to secure the funds needed to invest in a franchise. Much like a credit card, a HELOC has a revolving balance. Because a HELOC works most effectively during a time of stable interest rates and rising home values, it’s best utilized during a strong economy.

Loan from a friend or family member

Lastly, borrowing from friends or family is commonly used by franchisees to finance their business. Although friends and family may not want to receive interest on the loans, it’s important for franchisees to pay interest on the amount they borrow. Otherwise, the IRS might consider the money a taxable gift. A simple contract should be drafted and notarized to outline the loan terms. This will eliminate any potential disagreements. 

The resale clothing industry is expected to be a $64 billion industry by 2024 so once you’ve qualified for financing and are up and running, the market demand for your resale clothing store is definitely there. Sales for high-end consignment clothing are on the rise as more people, particularly millennials, want to save money and forego fast fashion for eco-friendly thrifting. Fortune reports that “the fashion resale market is exploding, growing 21 times faster than the retail market over the past three years, according to research from retail analytics firm GlobalData.”1

Ready to start your new career as an Uptown Cheapskate upscale resale clothing franchise owner?

For in-depth details about the Uptown Cheapskate franchise opportunity, download our Free Franchise Opportunity Report. You also can learn more by visiting our research pages.