Lendinero's blog on Growing Your Business
Will inventory financing to acquire food products help your business grow? Inventory financing is a lien of credit of short-term loan so you can purchase products to increase your sales. The challenge that the food industry has in obtaining inventory financing is that some products have shorter expiration dates. The shorter the expiration date, the less value that your inventory will have and the longer the expiration date the higher value your inventory will have. Lenders who specialize in inventory financing will value your product. In addition, lenders will use your inventory as collateral if the business cannot sell its products or default on the loan. This type of financing will only help you when your suppliers request cash up front or when they provide you with shorter payment terms to purchase their inventory. Depending on your expiration dates, this type of financing can be useful to acquire goods to prepare for peak seasons. For instance, if you sell wine you can acquire goods in September and October and prepare for Thanksgiving and the holiday season. When you have that extra cash you may be able to acquire more volume and reduce your acquisition costs on the goods. Depending on the products that you sell inventory financing to acquire food products is a great solution. Not all lenders provide inventory financing because lenders do not want to become food distributors. There are only a handful of lenders out there that can provide this type of financing. To obtain more information on how to finance your inventory write to: [email protected]. More than just business loans.
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