Inventory Loans & Financing
When a business needs to purchase a large amount of inventory to prepare for an upcoming event or busy season, it’s not rare for them to begin researching inventory loans, inventory funding or the lenders who provide them. Whether it’s time for a local festival or the start of tourist season, running out of inventory during the busiest time of the year can result in a massive loss of profits for a small business.
If cash flow is tied up in immovable assets, or working capital is low while powering through the slower seasons, small businesses might turn to fast cash business loans, inventory loans from a traditional financial institution or inventory funding from an alternative lender.
Inventory Loans vs. Inventory Funding
Inventory loans are a line of credit or short-term loan made to help a business achieve a higher sales volume – for example, by allowing a business to acquire extra inventory to sell during the holiday season.
On the other hand, inventory funding is an alternative loan product businesses use before or during periods of high sales volume. Unlike traditional loans, inventory funding is unsecured and does not require long approval times or collateral.
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How Are Inventory Lending Products Similar?
Both inventory loans and inventory funding are designed to help companies purchase the merchandise they need when they need it. While there are numerous lending options and types of business loans, the most convenient to business owners in this situation may be inventory financing.
Inventory financing involves using your newly purchased stock as collateral for an inventory loan. By using the newly purchased inventory as the guarantee of the loan, lenders are assured they’ll get most of their investment back, either through payments or receivables. This provides an advantage for the business owners of the lending agreement as well, giving them a way to pay back a large portion of the loan fairly easily if the inventory doesn’t sell.
Inventory financing benefits most business owners whether they provide a service or sell goods.
Retail businesses are one of the most popular industries for inventory financing, using the funding to purchase extra stock and prepare for the busy holiday season. For retail business in shore or college towns, inventory financing allows them to adequately prepare for the next wave of visiting customers after several slow months.
That being said, each business is different. While some retail stores may choose inventory financing, others will opt for the lending options from lenders with the best business line of credit they can find.
Is Inventory Funding Right for You?
Either way, Fast Capital 360 helps you find the financing option that works best for you. We know it feels like there’s a million different lending choices when it comes to finding funding for your small business;That’s why our business advisors are here and ready to explain how instant approval small business funding could benefit your business today.
Inventory funding and inventory financing is lending with the biggest advantage for business owners when it comes to restocking and readying your company.
Getting started is fast, easy, and won’t impact your credit score.