Inventory Loan

What is Inventory Financing?

Inventory Financing is a form of asset-based lending that uses inventory as collateral in exchange for an inventory loan. Inventory financing provides your business financial support to increase or acquire inventory supply of products. Inventory financing helps businesses to pay their suppliers in a shorter span of time than it takes to pay them after selling the products. Borrowers are not required to offer other business assets as collateral (except inventory) for borrowing inventory loans. With inventory loans, borrowers can finance various business activities, such as purchasing new inventory, meeting payroll demands, marketing and promoting finished products, and regular up keeping of office facilities.

Inventory loan is beneficial for:

Inventory Loan

• Seasonal Businesses

• Re-sellers, wholesalers, distributors, and manufacturing companies

• Solving temporary cash flow problems

• Purchasing more inventory to earn profits during holiday season

Who should consider borrowing inventory loans?

Companies that meet these requirements can borrow inventory loans:

• Have minimum sales volume of $500,000 per month • Have good growth potential

• Those with tangible inventory (service business need not apply)

• Have a list of finished products or raw materials that are required to be financed, along with values.

• Have reliable financial statements

• Have inventory on hand that could be leveraged for working capital

What kinds of lenders provide inventory finance?

The major types of lenders providing business inventory financing are commercial banks, finance companies offering small business loans, and business financial solutions companies. Traditional banks don’t offer inventory loans as they view inventory financing as high risk financial.

How does inventory financing works?

A business seeking funding applies for inventory loans to a lender. The lender will then evaluate the applicant’s assets in order to determine the loan amount that can be approved by the lender. 40% to 50% of the finished goods inventory value will be approved as a loaning amount. With simple fixed rate loan agreements, inventory loans ensure better advance rates than bank lines of credit. Inventory loans are short term loans, and must be paid within a year or so after selling the products. If you are a manufacturer, retailer, or distributor striving to get inventory loans in order to improve profitability and grow your business, register and apply for inventory loan via the portal. Our quick loan matching service application will help you find a reputable inventory financing lender. Fill our business loan quote form and then you’ll be informed of how many lenders matched your request. They will be in contact with you and will send you their inventory loan quotes.

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