How To Secure Inventory Financing
Inventory financing is one of the hardest assets to finance as it doesn’t offer much security value to a lender.
For well established businesses, working capital financing against accounts receivable and inventory can see a lender providing about 15% of the value of the inventory in financing.
If the business has been operating for over 2 years and is profitable, the positive cash flow can be used to get a term loan that could be used to purchase inventory.
As inventory amounts go up, and the inventory is more commodity in nature, there are a variety of inventory programs available, but they are more expensive than typical bank financing and require high profit margins to be justified.
Tags: business financing, inventory financing
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