Business finance 101: An overview of retail inventory financing

The retail industry in North America is expanding at a healthy rate, and more companies are willing to invest in new setups. However, there are inherent challenges within the retail world that can be hard to deal with – online shopping giants like Amazon, increasing costs, and shifting consumer loyalties. If you are a retail entrepreneur with a business that has overcome all these hurdles, you wouldn’t want to deal with concerns related to retail inventory financing. With financement d’inventaire Accord Financial, it doesn’t have to be complicated. In this post, we are discussing retail inventory financing in depth.

Here’s why retail inventory financing is hard

The retail industry suffered a major setback after online shopping became a norm for customers. Many small companies and retailers were forced to quit operations, and lenders were no longer interested in financing businesses in need of retail inventory. In fact, banks and traditional lenders have little interest in working smaller brands asking for loans less than $10 million specifically for retail inventory. Even when loans are available, complicated terms and conditions make financing hard for many companies.

Getting a loan for retail inventory

There are new lenders and financial services who offer loans for retail inventory, through asset-based financing. You can get a loan up to 90% of net retail inventory. In other words, your assets will be used to procure a loan that will keep up the cash flow. Depending on the service you choose, you can get up to $20,000,000, without worrying about financial covenants. Such asset-based loans allow retailers to expand their business as they work ahead. The premise of retail inventory financing is based on the fact that inventory remains the biggest asset for retailers. Business owners are aware of the need for retail inventory, which also becomes an asset in the balance sheet.

When to consider such loans?

You can consider retail inventory financing for one or many reasons. This could be related to expansion in new locations and cities, sudden increase in demand, or expanding to online selling. In many cases, inventory needs are real when the business is trying to stay afloat, or money is required for restructuring.

The good news is retail inventory financing is flexible and can help your business in expanding further, as and when opportunity comes along. Just make sure that you work with a financial service that has experience in the retail world and specializes in asset-based lending.

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