The increasing disposable income of working professionals and their changing perception towards jewelry is constantly propelling the growth of the jewelry market all over the world. Also, the rising acceptance of jewelry among men is considered a contributing factor to the massive growth, witnessed by the jewelry industry. Cufflinks, plain gold/silver chains, tie bars, cartography necklaces, and engagement rings have become quite popular in the male customer segment. However, rings top the list of the most-sold jewelry items in the U.S. Besides, the market for diamond jewelry is vast in the country. Research says jewelry store sales in the U.S. have been rising steeply over the last 5 years, and December, being the festive month, has always been the highest sales-generating period of every year. The global jewelry market size is anticipated to expand at a compound annual growth rate (CAGR) of 8.5% from 2022 to 2030 (Source: The U.S. jewelry market is currently witnessing colossal growth due to the rising demand for jewelry items, driven, primarily, by decreasing gold and silver prices, increasing GDP per capita, and the growing population of the female workforce and high net-worth individuals (HNWI). Also, the rising millennial income is fuelling the industry.

However, players in this lucrative market often require substantial working capital to smoothly operate and thrive in the highly-competitive jewelry industry. Though the jewelry business is profitable throughout the year, it reaches its peak during the festive season, before which, jewelry shop owners need to stock up on jewelry items, renovate their stores, improve marketing efforts and hire extra employees to handle the festive rush and increased demands. These pre-festival preparations drain quite a lot of money. Unlike the big jewelry stores, the small ones usually find it difficult to arrange such big amounts and hence look to acquire business loans, that they can repay with the profits they are sure to make in the festive season. However, it is very important for business owners to meticulously use the borrowed funds to gain a competitive advantage and earn enough to be able to repay the loans on time. Besides preparing for the festive season, jewelry store owners require business loans for carrying out day-to-day operations during slow business seasons or when they are facing a financial crunch due to any social, political, or economic crisis. Also, business finances provide entrepreneurs with the funds required to set up new store branches in different locations and acquire more customers.

5 Ways Jewelry Retailers Can Use Business Loans:

  • An entrepreneur can use the borrowed funds to improve marketing efforts, carry out impactful campaigns and organize promotional events. Effective marketing increases the brand’s visibility and makes prospective customers aware of its offerings and unique selling point. 
  • One can purchase extra inventory and stock the latest on-demand collections just before the festive season starts, as during this time people tend to shop the most.
  • Business finances can help jewelry store owners hire more customer service representatives and make sure all customers are attended to and offered a great shopping experience.
  • Jewelry is a luxury and hence, jewelry stores with plush interiors always have a competitive advantage over the ones which are more on the austere side. Hence, jewelry retailers looking to increase footfall in their stores must invest in renovations and upgrades. Business loans can be used to pay for such expenses.
  • Like any other, expansion is a must for jewelry businesses. To reach out to the maximum prospective customers, a jewelry store owner needs to open branches of his/her business in different locations. But, setting up a new store means purchasing extra inventories, hiring extra staff, paying a deposit for the rented space, etc. This requires a substantial amount of money. Hence, jewelry retailers who don’t have enough funds to pay for the set-up costs, often reach out to business financers.

Popular Financing Options for Jewelry Store Owners:

Short-Term Business Loans

This type of business finance is quite helpful as it allows entrepreneurs to use borrowed funds for any business purpose. These loans come with repayment terms between 3 to 36 months, depending on the credit score of the applicants. Also, interest rates are determined by credit scores. Interest rates are higher in the case of applicants with low credit scores. 

Merchant Cash Advance(MCA)

It is an advance on the future earnings of the borrower. A certain amount of money is lent in return for the borrower’s daily credit/debit card sales. The lender continues to withdraw the pre-decided percentage from the borrower’s business account until the total amount is recovered. MCA lenders are comparatively lenient in terms of credit score requirements and are more interested in the profitability of the borrowers’ businesses. MCAs are ideal for those jewelry retailers who can prove their business’ profitability over the last 1 year and are ready with strong business plans that assure heavy cash inflows ahead. Also, MCA lenders do not restrict the usage of the funds, offer same-day approvals and disburse funds within 48-72 hours of the approval. MCAs are extremely beneficial for businesses that are sure of growing exponentially if some financial support is given at the moment. Hence, jewelry store owners who require urgent money to prepare for the high sales-generating festive season, often choose MCAs.

Business Line of Credits

These are very similar to business credit cards and offer revolving credits. The borrowers are allowed to withdraw only the amount they require at the moment and save the rest for future use. The interest is also applied only to the withdrawn amount and not to the total approved limit. These are generally chosen by jewelry store owners who need small amounts. For the jewelry retailers looking to just fix the broken mannequins, get only a part of the store painted, buy a new showcase, etc., a business line of credit turns out to be quite helpful.