Inventory funding is a kind of short term loan made to a company to purchase products for sale. It is an asset based funding that allows businesses to use inventory as collateral to obtain a revolving line of credit against it.
Leveraging inventory loan could be a smart business move.
It is a very beneficial for manufacturers and dealers of consumer products. If your inventory is selling well and you are in need of more money to keep selling, the inventory funding / financing can be a best option for you. It is very beneficial to cover short-term cash flow gap, channel fluctuation, launch a new product and generally to grow their sells.
1. The lender gives an estimate on how much one can borrow against the inventory.
2. Inventory funding is a popular financing option for small to medium sized retailers or wholesalers.
3. A good business plan is needed in order to pay this loan back.
4. The appraised value of the inventory is taken into consideration by the Lander during funding.
5. It helps the businessman to keep it their shelves stocked.