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Inventory Financing

Inventory financing allows you to use inventory in your warehouse to finance your next batch of inventory before your current inventory is sold. It is a less costly solution for your business than raising equity capital.

Inventory financing for consumer goods provides you with a business line of credit that allows you to take short term loans for the amount you need at the time you need it. Online lenders offer this type of financing for consumer brands that need short term loans that will be drawn against and re-paid as needed.

Types of Inventory Financing

Inventory Loan

An inventory loan may be exactly what you need if you’re a retail or product-based brand that’s looking to grow. The simple truth is this: you need to be selling product to pay for your business expenses and keep a steady cash flow stream. Even if you’ve had a bad experience with traditional lenders, inventory financing companies might be just the solution you’ve been searching for.

Small business inventory loans can offer business owners quick cash to help them prepare for the future. If any of the following describe your financing needs, an inventory loan might be a viable type of financing for you to consider.

  • You want to buy inventory for an upcoming busy season
  • You’re looking to ensure those fly-off-the-shelves items are always in stock
  • You have experienced credit issues in the past
  • You’re a wholesaler looking to maintain a substantial amount of inventory in stock 

At the end of the day, a short term loan based on inventory collateral can help you adapt and be flexible, so you’re ready for the next opportunity the second it comes along. Using the value of your inventory to secure additional funding is a newer, convenient, alternative way to grow. 

Inventory Line of Credit

Inventory lines of credit can offer emerging, growing brands the continuous capital they may need to get to the next level. When you can eliminate the worry and stress of not knowing if you have enough inventory on hand to satisfy demand, you’re left with the time (and head space!) to focus on other aspects of your business. 

Even if your credit score isn’t top-notch, or if you’ve been roadblocked going the traditional small business loan route, or if interest rates scare you, inventory lines of credit can give you the game-changing amounts of money your business needs to not just survive, but to thrive.

How Does Inventory Order Financing Work? 

Ready to get started with a financing company that specializes in inventory loans? Apply now and start making your loan work for you in just six easy steps. You’ll have the improved cash flow you need to change your business forever. 

  1. Apply For Financing
    We make the process easy - just start your application online and provide some financial information. It takes less than a minute to get started. You’ll meet a helpful Assembled Brands team member and get to know more about us, while we learn about you and your business.

     

  2. Put The Funds From Your Inventory Loan To Use
    As soon as your application is approved and terms are signed, you’ll receive the funds in your bank account. An inventory loan offers virtually immediate access to cash, and that means you can get to work, with confidence that you have the financial backing to grow.

     

  3. Or, Use Your Inventory Line of Credit
    Inventory lines of credit allow you to simply request a draw from your lender to get the cash you need. From there, you can make inventory purchases before you need to, so you can focus on nurturing those essential relationships with customers.

     

  4. Place Your Order
    Once you have the cash from your inventory loan or line of credit in hand, you’re free to do what you need to keep your business running smoothly and efficiently. Set yourself up so customers know they can count on you. Eliminate stock-outs and cement your reputation as a reliable, high-end, trustworthy brand.

     

  5. Supplier Ships, You Restock
    If you’re ordering inventory, it will be shipped, delivered and ready to restock in no time. You never again have to worry about not having enough product on-hand to fulfill orders.

     

  6. You Sell, You Pay Back, You Draw Money Again When You Need It
    Accounts receivable and inventory financing go hand in hand. You sell your goods, and you’re able to pay off that business loan that was so crucial to your brand’s growth.  Then you can tap your line of credit again anytime you need funds.   

Advantages of Inventory Financing

  • Great for Growth Potential
    Use inventory financing funds to grow and expand your product lines, so you can increase revenue by offering and selling more products to more customers. Grow naturally, without putting a huge strain on your cash flow.

  • Solution For Smaller and Seasonal Businesses
    Inventory financing can be a great option for seasonal businesses who need to increase their inventory for a specific time of year when they expect a drastic uptick in sales. It’s also a viable solution for many small to medium-sized businesses, such as those achieving 100M in revenue or less. 

  • Cheaper Than Other Financing Alternatives
    Inventory financing is much cheaper than options such as revenue-based financing or merchant cash advances which are charged based on a percentage of your daily or weekly revenue and can have costs north of 30% on an annualized basis. 

Disadvantages of Inventory Financing

  • Not Always the Best Option for Enterprise Brands
    Large brands or businesses who would likely already qualify for traditional bank loans may not want to use inventory financing. They may actually need to borrow a much larger amount than what these deals typically offer. 
  • Your borrowing power is limited to your inventory on hand
    If you are just starting out and have no inventory on hand or have oversold and don’t have any stock on your shelves you won’t have anything to use as collateral.  In addition, if you already have borrowed against your inventory, you won’t be able to use the same inventory to borrow again.