Inventory financing

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Inventory financing

Used in the context of factoring and general finance to refer to loans to consumer product producers that use inventory as collateral. See also: Inventory loan.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Inventory Financing

A loan or line of credit available to a business secured by its own inventory. That is, a business places its inventory as collateral in exchange for an operating loan. Inventory financing is advantageous for businesses with a large amount of physical inventory ready to ship. Inventory financing is used as a stop-gap against temporary cash flow problems resulting from inventory ready to sell but not sold. It is not recommended as a long-term financing tool.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
The consensus wisdom appears to be that either these developers secure inventory loans to buy more time or they resort to distress sales.
SCALE Lending will seek to originate a variety of loans types, including land loans, construction loans, and condominium inventory loans.
They may also have a greater need for lines of credit and inventory loans than other sectors.
* Inventory loans: The bank looks at past sales trends of the business and gives a loan for inventory based on past sales.
Factors specialize in discounting receivables but generally shy away from inventory loans. Equipment finance companies specialize in term lending based on M&E appraised forced sale values and can supplement the line of credit offered from a separate financing institution.
Offers short, intermediate and long-term financing for real estate purchases, vineyard development, construction loans, winery operating and inventory loans and other services.
Warehousing is defined as the extension of a short-term, secured line of revolving credit from a financial institution to a mortgage banker that enables a mortgage banker to fund and inventory loans until they are delivered to a permanent investor.
* Inventory loans. Few banks will make an inventory loan because of the volatility of commodity markets.
Silverstein Capital Partners will focus on providing senior loans, bridge loans, subordinate loans, and rescue capital to borrowers on shovel-ready ground-up construction, heavy value-add repositioning, land and inventory loans on completed condominium projects.
Our firm was financing inventory loans on condo's 95% complete in 2009 and 2010.

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