How an Inventory Loan Solves 3 Critical yet Common Business Problems

Last Updated on December 4, 2017

Choosing the right business funding is somewhat like selecting a residential mortgage: there are various products, and each has a unique set of advantages and limitations. As such, there’s no standard “right” or “best” type of business loan — because that determination is ultimately based on the borrower’s needs and resources.
However, obviously there are borrower profiles that tend to choose one product vs. another. For example, many restaurant owners and other retailers obtain a merchant cash advance, because the repayment is easily affordable (i.e. a few percentage points of daily sales), and the term fluctuates based on revenues (i.e. the total cost of borrowing doesn’t rise if it takes longer to pay the advance back than originally anticipated).

inventory loans solve 3 critical problems

How Inventory Loans Solve 3 Critical Business Problems

  1. Running out of inventory: Whereas real estate professionals point out that the three most important aspects of a property are “location, location and location,” retailers and wholesalers know that in their world, success and stability is all about inventory, inventory and inventory. An inventory loan ensures that the shelves and warehouses are adequately stocked, so that customers get their orders promptly, and that the cash keeps flowing.
  2. Breaching reseller agreements: Many reseller agreements compel businesses to have a minimum threshold amount of inventory on-hand, regardless of whether it eventually sells. Failing to meet this requirement can lead to financial penalties (i.e. losing preferred rates or terms), and in some cases, it can trigger a material breach that invalidates the agreement and ends the relationship. An inventory loan ensures that businesses are consistently in compliance with inventory level requirements, which could mean the difference between succeeding or shutting down.
  3. Running out of working capital: An inventory loan functions as a revolving line of credit, which businesses can draw down as required in order to cover expenses or investments. In addition to having immediate access to funds (i.e. there is no additional application process), the line is secured by inventory and so it’s less costly than an unsecured line.

How to Get an Inventory Loan as Soon as 24 Hours

At National Business Capital, we proudly offer inventory loans to businesses across the country — including many that have been told “no” by banks and other lending firms. To learn more, fill out our two-minute application or start an online chat right now (click the bottom-left of your screen to get started).

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.