Top 5 Reasons Why You Should Apply for Inventory Financing

Apply for inventory financing

Inventory management for small businesses is a challenging endeavor. You need to find a way to effectively balance the products or supplies that go in and out of your business. If you have too much inventory, you’re tying up valuable working capital in unsold products or raw materials. On the contrary, having too little can cause problems for your company. If you don’t have what your customers are looking for, they will turn to other companies that offer the same products (hint: your competitors!).

But finding the right balance between too much and too little inventory can be tricky, especially for companies without enough funding. Inventory financing is a perfect solution for businesses in need of capital for products and materials. Whether you’re in the food service industry, retail, or wholesale, you’ll definitely benefit from inventory business loans.

If you’re still on the fence, here are five reasons why you should apply for inventory financing.

1. Deal with Seasonal Demands

Seasonal businesses often experience fluctuations in sales. If you’re operating a seasonal business, you can definitely benefit from an inventory loan to purchase products during slower seasons. For example, companies that sell Christmas decorations will see a decline in sales after the holidays. To prepare for the upcoming holiday season, the business will need enough working capital to buy inventory.  You can use commercial lending to purchase additional products to meet customer demands as they start their holiday shopping.

2. Increase Buying Power

Applying an inventory loan to purchase a large amount of inventory enables you to take advantage of unexpected opportunities, like steep discounts for bulk orders. Suppliers are generally willing to offer discounts for large purchases. They may also offer off-season discounts, so make sure you know what you need and buy accordingly.

Compared to traditional business loans, the underwriting process for inventory loans is faster. Some lenders can even approve your loan and fund your business within 24 to 48 hours! This comes in handy if you want to seize business opportunities.

3. Quick Access to Working Capital

If you’re running low on inventory and you don’t have enough cash to replenish it, applying for inventory financing is a wise move. You’ll be able to purchase the right amount of inventory to keep your business going.

Aside from products and supplies, you can also use the funds from a business loan to improve inventory management. You can invest in an efficient inventory management software or a point-of-sale (POS) system that has inventory management features.

An efficient inventory management software ensures that you’re investing in the right stock, as well as organize purchase orders and other relevant documents.

4. Hassle-Free Underwriting Process

As mentioned, the application process for inventory business loans is simpler and faster compared to more conventional forms of financing. If you choose to fund your business with inventory financing, it would not appear in your company’s credit report. The amount you’re going to borrow will not affect your business’ debt-to-income ratio. In other words, inventory financing requires little paperwork, and it costs less compared to traditional business loans.

5. Offer New Product Lines

Business owners know that it’s important to keep up with your existing product lines. But if you solely focus on your current products, there’s a great chance that you’re missing opportunities to grow and expand your business. Generally, when a customer buys a product, they will also need to purchase a supporting item. For example, a company that sells motorcycles may want to consider selling motorcycle parts and gears. Offering new product lines can definitely increase your sales in the long run. Adding new products may require a large investment on your part. Inventory business loans can provide you with the capital you need to expand your offerings.

Check Out Inventory Financing for Your Business Today!

Businesses that mainly sell goods should consider applying for inventory financing. Whether you’re running low on inventory or you want to offer new product lines, an inventory loan gives you the funds you need to do just that. Read our blog for more business tips.

About April Heavens- Woodcock

Author: April Heavens–Woodcock , is the Chief Buzz Officer Touching Clients a Digital Marketing Firm that specializes in strategic online marketing development for businesses. She is passionate about helping businesses grow their bottom line with effective tools. She speaks regularly on social media, email marketing, and marketing around the East Coast.