How it works
Inventory finance supports the purchase or carrying cost of eligible stock. It can be a standalone facility or part of an asset-based line. The lender typically discounts inventory value to account for liquidation risk and may exclude certain items.
Where it can fit
Match the facility to inventory turns, seasonality, and sell-through. A short production or sales cycle with reliable demand creates a different risk profile from speculative inventory accumulated for an uncertain launch.
Look closely at the trade-offs
Slow-moving, perishable, custom, or obsolete items may have little borrowing value. Include freight, storage, returns, and markdowns in the forecast. A warehouse full of goods is not a substitute for an achievable repayment plan.
Your next-step checklist
- Inventory aging and turnover
- Purchase and landed cost
- Storage and insurance
- Concentration and obsolescence risk
Crack this combination.
Will all stock necessarily qualify as collateral?
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Sources & further reading
This file draws on the following references. Product availability and requirements must be confirmed with the provider.
Levr: loan types