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When is the best time to think about Inventory Financing?

Published on 11th April 2018 - Last update on 7th July 2020

For many businesses operating across a number of UK sectors, inventory is an invaluable resource. If your business operates around the sale of stock, supplies, ingredients and raw materials to customers, living up to their expectations can be a daunting task. Without them your business may not be able to operate, whilst acquiring them through your own finances could add to operating costs and possibly push you towards negative working capital. However, Inventory Financing can often provide a much-needed pillar of support in the form of a Line of Credit (LOC), granting your business access to a monthly allowance from a lender-controlled facility. So, if you require assistance in managing your business’ inventory, here are 3 of the most commons reasons for applying for Inventory Finance (also known as Stock Finance):

  • Acquiring additional stock
  • Refreshing your business’ offering
  • Supporting your cash flow

Can I use Inventory Finance to acquire additional stock?

Whether you’re seeking to replenish your inventory or secure additional stock to better equip your business for an unexpected increase in demand, Inventory Finance can help. With access to a monthly allowance based on the appraised value of your inventory, Inventory Finance enables you to seize each opportunity that comes your way. Plus, since a Line of Credit allow to you reacquire these funds after you’ve repaid them on a cycle, Inventory Finance can also be used to help maintain sufficient stock levels.

Need help keeping up with customer demand? Rather avoid adding to your working capital? Apply for Inventory Finance, or learn more about how your business could benefit.

Can Inventory Finance help me refresh what my business has on offer?

As your business approaches a new trading season or your customers’ tastes change, refreshing your business’ inventory in order to meet these demands is essential.

However, bringing in a new range of stock doesn’t come without a cost, which is where Inventory Finance could help. With this type of finance you can, once again, acquire an allowance which can help you quickly refresh your inventory and repay the agreement as your business converts each item into cash. Therefore, Inventory Finance becomes an invaluable resource that allows your business to make the most of all the available opportunities, even if you’re working to a tight deadline.

Could I use Inventory Finance to subsidise my business’ cash flow?

Yes. As well as allowing you to acquire inventory, Inventory Finance can also be used to support your business’ cash flow during slow trading periods. With access to a monthly allowance based on the equity stored in your existing inventory, you can withdraw funds which can help you settle your business’ monthly financial commitments. However, the money withdrawn must be fully repaid within 30 to 90 days and, should you draw more than what the allowance permits, you may incur an overdraft penalty. Nevertheless, using the equity stored in your inventory can be a great way of keeping your business afloat during such periods.

Could your business benefit from Inventory Finance?

If your business relies on supplying goods and services to your customers, satisfying the demand for fresh stock, supplies, ingredients and raw materials can, at times, be difficult. Although using your own funds may seem like a wise move, doing so will add to your monthly expenses, putting your working capital under added pressure. If you’d rather not risk your business’ finances, you could explore how Inventory Finance could help. Much like a credit card, Inventory Finance offers you a line of credit which can be used to manage and support your business’ inventory. So if you require additional stock or need help supporting your cash flow, apply for Inventory Finance today, or find out more with Rangewell.

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David Harrison

David Harrison

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