As you research various small business loan options, you’ve come across – or will inevitably encounter – the idea of inventory financing. However, as with many possibilities in the business lending world, there are a few layers and aspects that you need to know before pursuing or rejecting this option.
What is Inventory Financing?If you assumed that inventory financing is, as the term suggests, capital that you use to purchase inventory, then you’re right on the right track but there’s more to the story.
Inventory Financing: What You Need to Know
The most important thing to know about inventory financing is that it’s only designed to purchase inventory (hence the name). As such, businesses that exclusively provide services will not qualify for inventory financing – since they don’t stock inventory in the first place.