If you borrow $1,400,000 on a 5 year loan at 13.9% payments come up to $32,503.02/month or $390,036.24/year for 5 years. This is only making payments on fixtures and equipment. How do you expect the store to show a profit or have any cash flow in the first five years after adding your other expenses?
This is really a liquidity issue. The company to this point has been spending this money out of pocket. The additional cost is the interest paid. It's easier to come up with $390k at $32.5k/mo than $1.4m all at once.
Look at this as a bridge until they can get to their economies of scale point of 26 stores. The alternative to securing $16m in financing would be to sell a million shares at $4.00/share or delay expansion. Since they're not at a point of economies of scale that would be bad for obvious reasons. Dillution is inevitable, but given the choice I'd rather see those shares sold for $6 or $7 per share later and pay 13.9% now than sell those shares for $4. Financing equipment is not a long term strateqy of the company.