Executive Briefings

Inventory Loans More Likely for Well Established Companies

An inventory loan can be a great financing tool for well established companies with short-term inventory shortages. But for a new business, it might be difficult to obtain an inventory loan since it won't have an extensive sales history, especially if the loan is for a new product line.

Typically, lenders prefer to give an inventory loan to companies with consistent sales history on a proven product to avoid the scenario of a company defaulting on its loan.

Even though the loan will be secured by one's products, there is risk in financing a new product line. And, of course, the economy is still struggling.

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An inventory loan can be a great financing tool for well established companies with short-term inventory shortages. But for a new business, it might be difficult to obtain an inventory loan since it won't have an extensive sales history, especially if the loan is for a new product line.

Typically, lenders prefer to give an inventory loan to companies with consistent sales history on a proven product to avoid the scenario of a company defaulting on its loan.

Even though the loan will be secured by one's products, there is risk in financing a new product line. And, of course, the economy is still struggling.

Read Full Article