How can Inventory Financing help your business?
Most businesses purchase their inventory with existing cash flow. If you are using the existing cash flow to make your next purchase you may be putting a lot of pressure on your cash flow. Any business that carries inventories knows the importance of stacking up the shelves. You have major risks involved when acquiring inventory.
As a small business owner who manages inventory you know that you run the risk of over stocking. You may purchase a certain amount of inventory and your projections were wrong. If you have excess inventory you will need to sell it at a discount or perhaps maybe even lose money. As a small business owner you want to avoid this error. This is when inventory financing can help your business.
With inventory financing you can use the lender’s money instead of the earnings from the business to make your next purchase. This will help your cash flow immediately because you don’t take cash from your gross earnings. At the same time if you have excess inventory that cannot sell that fast you may have more time before you get nervous with inventory financing. Depending on the terms of the loan you may have an additional three, five or twelve months to push that inventory because you have term loan. This can prevent you from having to lower your prices or sell the inventory desperately. Inventory financing will help you make better financial transactions.
If you’d like to learn about inventory financing at Lendinero, click here.
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By: Gil Zapata
Miami, FL. September 18th 2017