If you run a business. you may find that you don’t always receive revenues promptly. Yet, operating expenses such as rent and utilities must be met every month. In essence, you can have a cash-flow problem, even though you know you will eventually get paid. Is there a way to fix this problem?

Inventory Financing

Inventory financing is a potential solution. In this form of financing, a business obtains funding by submitting a draw request to the lender. who deposits the funds in your bank account. Once the funds are on your business’s account, you can use the cash for any business expense. Payback happens incrementally as inventory is sold. 

Finer Points of Inventory Financing

Inventory financing is generally not the first option that you should choose. That is because it tends to be more costly than other forms of financing. Other solutions such as a short-term loan or accounts receivable financing should be explored first.

To qualify your business must have a sufficient amount of inventory or raw material of value on hand. The lenders will want to look at your business’s financials. Most lenders will also want to know that you have exhausted other funding options.

Finally, more due diligence and financial controls are required for inventory evaluation. Because of this, most lenders will not provide funding for less than $700,000.

Work With Point High Finance

Now that you know a little more about inventory financing, you may be thinking about adding it to your business. No doubt you have additional questions about it. Give Point High Finance a call today. They can continue to educate you and why this form of financing may be ideal for your business model or suggest other forms of lending that may be more appropriate.