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Services: Inventory Financing

Inventory financing allows your company to leverage its current inventory. It provides working capital to pay for suppliers, employees, and other company expenses.

Commercial Capital LLC is a leading provider of inventory financing to small and midsize companies. For a quote, fill out this form. Call us toll-free at (877) 300 3258 to speak with a representative.

(Note: If you need funding to pay suppliers and build inventory, consider supplier financing instead).

Is this solution right for you?

Small and midsize wholesalers often find it difficult to get credit terms from suppliers. Many suppliers don’t extend enough trade credit. Other suppliers don’t extend enough credit or demand fast payment. This situation limits how much inventory you can purchase. It also limits your ability to sell products and grow the company.

Inventory financing is a type of asset-based financing that allows you to leverage your existing inventory. It improves your cash flow and provides funds to pay for business expenses.

This solution is available to small and growing businesses that might not qualify for bank financing. It may be right for your company if you:

  1. Have a reliable inventory management and inventory system
  2. Can provide accurate financial statements
  3. Own easily marketable inventory or raw materials
  4. Need a minimum of $700,000
  5. Have exhausted other options such as receivables financing

How does inventory financing work?

Once the line has been set up, you can finance inventory shortly after it has been acquired. Your company can draw funds from the line by submitting a request to the finance company.

Funds are deposited into your bank account shortly after the request is processed. The inventory line is paid back when the product is sold to your customers. Transactions are settled through a factoring line, an asset-based loan, or your credit card proceeds.

The type, amount, and value of your inventory determine the size of the line. We can finance up to 75% of the appraised inventory value or 50% of the purchase cost – whichever is lower.

Inventory is usually appraised using the net orderly liquidation value (NOLV). At times, the NOLV can value your inventory substantially lower than the current market value. This valuation can affect the amount of funding you obtain. To learn more, read “How Does Inventory Financing Work?

Advantages of this solution

Inventory financing offers many advantages to small companies. These include the following:

  1. Leverage your inventory and raw materials
  2. Easier to obtain than a line of credit
  3. Provides working capital to pay business expenses
  4. Can be used to accumulate additional inventory
  5. 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 the following steps:

  1. Review of financial statements
  2. Field exam at your warehouse (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. Consequently, there is a cost to perform the due diligence. The cost is based on the size and complexity of the line.


Inventory financing has some limitations compared to other asset-based solutions, such as accounts receivable factoring. Companies should evaluate these limitations to ensure inventory financing is the right solution for them.

1. Upfront cost

Inventory financing lines require more due diligence than most asset-based solutions. This is because it requires field exams to appraise the inventory. Consequently, they have a higher upfront cost.

2. Funds availability

The funds you can leverage from your inventory vary based on the inventory’s type, quality, and marketability. Most companies use the NOLV appraisal. This approach method may yield a value substantially lower than what you paid for the inventory.

3. Ongoing cost

Inventory financing lines are usually more expensive than other asset-based solutions of comparable size. This expense is due to their risk and their management requirements. To learn more, read “Inventory Financing vs. Factoring.”

Get a quote

We are a leading factoring, inventory financing, and asset-based lending provider. For a quote and a callback, fill out this form.