5 Signs That Inventory Financing Might be the Right Funding Solution for Your Business

Last Updated on November 6, 2017

If you’re in the market for business funding, then you’ve already discovered (or will very shortly find out!) that there are many different products available. Especially if you head into the alternative funding marketplace, there are fewer restrictions and therefore more options to choose from. As you’re browsing funding options, one lesser known option that could be the right solution for your business is inventory financing.

inventory financing is the right funding solution for her business

What is Inventory Financing?

Inventory financing is a type of asset-based lending that provides working capital to purchase inventory, or in the case of manufacturers, to purchase raw materials that are then processed into finished goods. Some lenders — including National Business Capital — also provide inventory financing for businesses that need quick access to cash in order to cover urgent expenses, such as emergency repairs to buildings or vehicles.

Is Inventory Financing Right for You?

Generally speaking, inventory financing could be the right funding solution for your business if you answer “yes” to the following:

  • Your products are selling well, and you don’t anticipate any significant demand slow-downs in the near future. Note that if this isn’t the case, then you will probably be better off opting for a working capital loan or a business line of credit.
  • You want to leverage borrowed capital to generate a return on investment (i.e. you are in a position to “spend money to make money”).
  • You have a perpetual inventory system in place, which allows you to know the precise level of inventory at any given time. This is necessary because lenders need to keep an eye on stock levels to make sure that everything is processing as mutually anticipated.
  • You have the sales force and technology in place to maximize sales. Lenders want to know that you’ll be doing everything you can to move inventory.
  • If applicable, you have contracts with third parties (such as retailers) with clauses that insist you maintain minimum inventory levels at all times — regardless of whether purchase orders are forthcoming — and you want to ensure that you meet this fundamental requirement.

Get Inventory Business Loans Today

To learn more about inventory financing, and to determine which funding solution is right for your business, fill out our 1-minute funding application. Our team of funding experts can help you find the right solution to fit your particular needs!

At National Business Capital, we know inventory financing allows a business to capitalize on an opportunity to take on larger contracts and to produce more inventory. Most of our inventory financing customers are looking to grow their business and they just need a little help getting the raw materials to turn into products or buying the inventory to increase their sales. If you’re looking to grow your business but need ideas, check out our free eBook “7 Profitable Opportunities That You Could Miss Without More Business Funding” today:

National Business Capital & Services is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.

Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.

We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!

About the Author, Megan Capobianco

Megan is passionate about helping business owners along their journey - providing them with relevant content they can use in their day-to-day operations.

Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advise from National Business Capital & Services and the author. Do no rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely in this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there maybe errors, omissions, or mistakes.