What are Small Business Inventory Loans?
You may have heard the term small business inventory loans. But do you really know what it is all about? We break it all down for you right here. This form of funding just might be perfect for your business. It’s also called inventory financing.
According to a definition from Investopedia –
“Inventory financing is a revolving line of credit or a short-term loan that is acquired by a company so it can purchase products for sale later. The products serve as the collateral for the loan.”
You can get a low rate credit line. And all you need to do is use your current inventory as collateral. Inventory is valuable! It is perfect for collateral for small business inventory loans.
Check out these Credit Line Details
You can get approval for a line of credit for 50% of inventory value. Rates are usually 5 – 15% depending on type of inventory. And you can get funding within 3 weeks or less. It can’t be lumped together inventory, like office equipment.
With inventory financing, there may be restrictions on the type of inventory you can use. This can include not allowing cannabis, alcohol, firearms, etc., or perishable goods. And there can be revenue requirements. There may also be minimum FICO score requirements.
Let’s look at Qualifying for Small Business Inventory Loans
You will not need financials, or good personal credit. Your business must have existing inventory now that is valued over $500,000. Lender will also check the quality of your inventory management system.
The inventory might be of supplies, retail merchandise. materials used to produce your product, or other non-obsolete inventory. The lender will review your existing inventory. If you have inventory that qualifies you can get approval quickly with just a review of your inventory records.
You Can Get Fast Funding with Inventory Financing
After the lenders review your inventory summaries, you can get your initial approval and funding in 3 weeks or less. And you can get a working capital credit line to use for whatever purposes you need.
But What if You Have Credit Issues?
This program is perfect for business owners with credit issues. Lenders are not looking for, nor do they require good credit to qualify. You can even get approval for a credit line with low rates, even with severely challenged personal credit and low credit scores.
You can get approval regardless of personal credit quality. So this is even if you have recent derogatory items and major collections on your credit report. This is one of the best and easiest business financing programs in existence that you can qualify for. And you can get really good terms even with severe personal credit problems.
What are the Benefits of Inventory Financing?
Get 24 hour preapproval and get secure financing of 50% of your inventory value. It is just an easy inventory review for approval. And you will pay no application fees.
You can get approval even with poor credit. Go from application to funding in 3 weeks or less. You can get approval with no revenue requirements. This is low rate financing. Enjoy credit line amounts range up to $500,000.
What are the Approval Amounts?
You can get up to $500,000, and bad credit is accepted. Your inventory serves as your collateral. No financials are necessary.
Let’s Look at Qualifying for Inventory Financing from Credit Suite
You will need over $300,000 in inventory. So, this means no jewelry, apparel, highly seasonal items, or high tech items subject to rapid obsolescence.
What do the Approval Amounts Depend on?
You can get approval for $150,000 or more. The approval amount is based on the actual value of the inventory. You can get approval for financing up to 50%.
What are the Interest Rates?
Interest is very low. It is typically as low as 2% monthly. And you can get approval in 3 weeks or less.
What if Small Business Inventory Loans are Impossible to Get Now?
There are other ways to get financing for your business. Your business – and you – have assets beyond inventory. And you can tap these assets as collateral. You can use a 401(k) or IRA, accounts receivable, or stocks or bonds. Did you know that the 401(k), stocks, or bonds do not even have to be yours? You can work with a partner with these kinds of assets.
Check out Securities-Based Financing
So you can use existing stocks as leverage to get business financing. Borrow as much as 90% of their value. You continue to earn interest on the stocks pledged as collateral. And closing and funding takes less than 3 weeks.
Take a Look at 401(k) Financing
You can use your existing 401(k) or IRA as collateral for business financing. This program uses IRS proven strategies, called ROBS. And you will pay no tax penalties.
You still earn interest on your 401(k). Pay low rates, often less than 5%. And you can close and fund in less than 3 weeks. You can usually get up to 100% of what is “rollable” within your 401(k).
Note: your 401(k) has to be with a company that is no longer employing you.
What about Accounts Receivable Financing?
You can use your outstanding account receivables for financing. In this instance, you can get as much as 80% of receivables advanced ongoing in less than 24 hours. The remainder of the accounts receivable are released as soon as the invoice is paid in full. And closing takes 2 weeks or less. Pay factor rates as low as 1.33%. These are accounts receivable credit line with rates of less than 1% with no consumer credit requirement.
The receivables should be with the government or another business. If you also have purchase orders, you can get financing to have those filled. And you will not need to use your cash flow in order to do so.
Check Out what OnDeck has to Offer
OnDeck offers inventory loans and business lines of credit. Term loans run $5,000 to $250,000, with 12-month terms, paid back daily or weekly.
Their lines of credit run from $6,000 to $100,000. Pay back over 12 months, with automatic weekly payments. Find them online at ondeck.com/loantype-inventory-loans.
Or how about an Amazon Corporate Credit Line?
Do you have an online business? Then you can get a revolving credit line from Amazon. Make minimum payments or pay in full monthly. Pay 12.99% purchase APR (minimum interest charge is $1). You get an option to apply as a personal guarantor to build business credit. And you will enjoy 24/7 Customer Service.
Consider Amazon Lines of Credit and Working Capital Loans
If your business is eligible, you will see funding options when you log into Seller Central. Currently, lines of credit are offered by Marcus by Goldman Sachs. Loans come from Amazon Lending – specific terms are tailored to the business. Get access to loan funds within 5 days. Learn more at sell.amazon.com/programs/amazon-lending.html.
Small Business Inventory Loans: Takeaways
Your inventory is a valuable business asset. You can leverage it to get business funding. Get approval with excellent terms, even if your personal credit is not so hot. And consider alternatives like 401(k) financing or OnDeck and more if you can’t get small business inventory loans right now.