Inventory Financing

Inventory management is a cornerstone of success in business operations. Controlling cash flow and ensuring your inventory is well-stocked can be a delicate balancing act — that’s where inventory-based financing comes in.

Inventory financing is a valuable financial tool that empowers your business to foster growth while navigating the complexities of inventory management. It frees up your working capital for other operational needs.

Is your business ready to reap the benefits of fulfilling customer demands without financial strain? Learn more about the benefits of inventory financing that meets your needs.

Inventory financing, aka inventory loans or inventory financing loans, is a form of asset-based financing. Businesses often use this lending service during times of higher production alongside lower cash flow. Essentially, this is a short-term loan business owners can use to buy stock. It is valuable for organizations that need extra capital to manage their inventory better or restock shelves. The value of the loan or credit line depends on the collateral your business offers.

The premise is straightforward. You offer the value of the stock you already have as collateral to get a loan you use to buy more stock. Your financing provider assesses your inventory’s value and offers you credit based on a percentage of its worth. As your inventory levels fluctuate, so will your available credit and repayment. Your repayments are periodic, allowing you to repay the loan with interest during an agreed-upon schedule.

In some cases where inventory is running low, you can also list the following as collateral.

• Real estate: If you own real estate, you may be able to put this up as collateral for your inventory financing. Your lender will order a property appraisal to determine its value and whether it can be collateral for the loan.
• Accounts receivables: Receivables due for 30 to 90 days can also be collateral. As with inventory, the more you have invoiced, the more you may be able to qualify for.
• Equipment: You can ask your loan officer about putting up high-value equipment and machinery as collateral.

Inventory financing may be more cost-effective than raising equity capital. It is a dynamic system that provides you with the necessary funds while aligning with inventory turnover cycles. This type of funding comes with the following benefits.

• Cash flow benefits: Your business maintains a healthy cash flow by using funds set aside for your inventory purchases.
• Seasonal flexibility: If your business experiences seasonal fluctuations, inventory financing helps secure the capital you need to stock up during peak seasons.

• Better inventory capacity: Businesses wanting to expand or diversify product lines have access to the capital they need to buy new inventory. It helps your operations grow and meet customer demands.
• More accessible: Even newly formed startups can access inventory financing. 

When you partner with Porter Capital, our team works to give you quick access to the funds you need to buy more inventory and grow your business. It only takes a few simple steps to manage your inventory financing.

Companies dealing in consumer goods or retail benefit the most from inventory financing due to the nature of product buying and selling. They particularly benefit from the nature of this short-term loan when a sales increase is imminent or it is time to expand product lines.

Inventory Loan

Many retail or product-based brands use an inventory loan to grow their business. It may be ideal financing for your business if these factors describe your operations.

• Stocking up: You need to stock up on inventory for peak season.
• Optimize inventory turnover: You want to keep fast-selling items in stock.
• The right type of operation: Your business is wholesale.
• Your business needs a hand: You have past challenges with credit.

Line of Credit

Emerging brands may enjoy the continuous capital a line of credit offers. You can enjoy competitive interest rates and peace of mind knowing you will have sufficient inventory.

You can offer liquid or physical collateral when applying for this type of asset-based loan. Your application’s success depends on the strength of your collateral. The documents you provide help verify your assets and determine your eligibility. Essential elements of an inventory financing application include your bank statements, property records and tax returns.

Porter Capital offers inventory financing for all businesses because we understand that access to capital helps you grow. We are a leader in our field, with expertise spanning industries across North America. You can expect these perks when you choose Porter Capital.

• Flexible funding options: Credit lines offer ample flexibility and run from $10M to $25MM.
• No hidden fees or terms: You get transparent funding with clear communications.
• Funding approval in 24 hours: We aim to give you same-day financing.
• Competitive rates: Our factoring rates start as low as 0.75%.
• Simple application process: We require minimum documentation for your online application.

As markets evolve, managing your inventory through financing tools becomes vital in keeping your competitive advantage for long-term success. Your business can secure the funds to buy more stock and market sales by leveraging your inventory as collateral. Your business will enjoy seasonal flexibility, better cash flow and lower holding costs.

With over 30 years of industry experience, Porter Capital is an expert in giving business owners financing options to run their operations. We are a trusted business-to-business factoring company, offering the asset-based loans your business needs. Contact us today for straightforward, reliable inventory financing.