Inventory financing explained: Get a loan in time!

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For businesses engaged in manufacturing, retail, and related sectors, inventory is often their biggest investment and asset. When there is a need for finance to fund operations, expansions and working capital needs, inventory financing can be a good option. With Accord inventory financing, businesses can get the money they need, without going for traditional loans. Here are some facts worth knowing. 

What exactly is inventory financing?

As the name suggests, inventory financing is a form of secured loan, which is secured against existing inventory/stock. The lender will work with an appraiser to determine the value of inventory, and the loan is usually a percentage of the current inventory value. The interest rate and terms of inventory-based loans may vary from one lender to another, but largely, factors like performance of the business, inventory volume, and credit standing do have an influence. Many companies rely on inventory financing for financing their inventory purchases too! Do you know What is wild wallet hack?

Knowing the important aspects

It should be noted that inventory financing is a form of asset-based lending, and the term is typically one year. However, many lenders do allow companies to borrow an amount for a shorter term, especially if their loan requirement is less than a certain amount. In other words, when you don’t need a huge amount, you don’t have to bother about the minimum term. There are also options related to supply chain financing, which have similar terms & conditions of lending. Startups and new businesses can also consider this kind of loan, given that there is collateral involved, which reduces the risks for the lender. 

Benefits at a glance

There are several benefits of retail inventory financing. Firstly, you are using your own inventory to obtain a loan, and since the amount is not typically huge, you can expect to repay it back on time. Also, this form of financing comes in handy when other forms of lending are not viable. For managing operational costs and working capital needs, retail inventory financing is one of the best solutions for businesses in this sector. 

Final verdict

If you want to make the most of retail inventory financing, make sure that you check for a reliable lender. Find out how quickly you can get approved, and if there are special requirements. Also, there should be an intention to repay the loan, because your inventory and stock is at stake. Review the terms & conditions in depth before signing up. 

 

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