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Services: Inventory Financing

Getting credit from suppliers can be difficult for small wholesale and manufacturing companies. Often, suppliers don’t extend enough credit. When they do extend credit, they usually demand fast payments. This limits how much inventory you can purchase, and ultimately limits your ability to sell your products and grow.

If your company has funds tied to inventory, or needs funds to purchase more inventory, consider using inventory financing. It is a form of asset based financing that allows you to leverage your existing inventory. It improves cash flow and provides funds to pay for business expenses. It’s available to small and growing businesses that might not otherwise qualify for bank financing.

We are a leading inventory financing company and can provide you with a competitive proposal. For a quote, please call (877) 300 3258 or fill out this form.

Is this solution right for you?

Our financing solution may be right for your company if you:

  1. Manufacture or distribute products that are sold to commercial clients (no direct retail sales)
  2. Have a reliable inventory management system with perpetual inventory
  3. Are able to provide accurate financial statements
  4. Own easily marketable inventory or raw materials
  5. Need a minimum of $500,000
  6. Have exhausted other options such as receivables financing

How does inventory financing work?

Our program is offered in two possible forms. As part of an asset based loan, or combined with an invoice factoring facility. This offers a more cost effective way of financing and enables you to settle transactions easily.

Inventory can be funded shortly after it has been acquired. Your company submits a draw request, and once it is processed, the funds are deposited to your bank account. Transactions settle once the inventory is sold off to customers as finished product.

We can finance up to 80% of the appraised value of the inventory. Note that inventory is appraised using its forced liquidation value, or net orderly liquidation value (varies). At times, these appraisals can value your inventory substantially lower than current market value. This can affect the amount of funding you get.

The inventory line is paid back when product is sold off to your customers. The invoice is financed through a factoring line or through an asset based loan, and part of the proceeds are used to close the inventory line.

Advantages of this solution

Our program has a number of advantages for your company. Inventory financing:

  • Allows you to leverage your inventory and raw materials
  • Is easier to obtain than a line of of credit
  • Provides working capital to pay business expenses
  • Can be used to accumulate inventory
  • Can be used by distributors, wholesalers and manufacturing companies
  • Line can increase as your business grows

Due diligence

Qualifying for an inventory financing line is easier than getting a line of credit at the bank. The underwriting process can take a couple of weeks and requires a few steps. They include:

  1. Review of financial statements
  2. Field exam at your plant (or plants)
  3. Review and test of your inventory tracking system
  4. Inventory appraisal

The field exam and appraisals may require that we work with a third party company and travel to your facilities. Because of this, there is a cost to perform the due diligence. The cost is based on the size and complexity of the line.

Get a quote

We are a leading provider of factoring, inventory financing, and asset based lending. For a quote, please fill out this form or call (877) 300 3258.

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