If you’re thinking of using an inventory loan to fulfill orders or to satisfy unexpected demand, StreetShares has got you covered. Inventory financing can keep your business running smoothly through all unexpected growth challenges.
An inventory loan (sometimes called inventory financing or a micro business loan) is typically an unsecured short-term loan specifically meant to help a small business purchase inventory (items for sale). These loans are commonly used for seasonal, quick-turnaround, or discounted inventory opportunities, and are meant to be paid off quickly. While some inventory loans are secured using the inventory itself as collateral, most are unsecured and backed by a business’ cash flows. Short-term loans are a good choice for inventory purchasing purposes, as businesses often recoup the inventory costs far before the 5-10 year terms found in bank loans.
Short-term small business loans keep your credit and capital from being tied up in loan repayment for years after you’ve sold the inventory you purchased with your loan. Acquiring an inventory loan can give your business the opportunity to pursue time-sensitive inventory demands, such as items with short shelf life or those being offered at a deep discount.
To apply for a small business inventory loan, you will have to prove your ability to pay it back with documentation such as bank statements and tax documents. Your credit score will also often be taken into consideration. These factors will determine your loan amount and APR. Once approved, you and your lender will agree on a repayment schedule.
Even though approval and funding can be faster with inventory loans, like an equipment loan, the best time to get a small business inventory loan is before your business needs it. This will give your organization the capital it needs to keep functioning at the highest capacity. By thinking ahead, you’ll be able to do your research, make a funding decision confidently, and get the best rates available.
StreetShares provides the best options for getting the cash you need when you need it most through our collateral-free lending options.
Learn more about other simple collateral-backed funding solutions that enable small and medium-size companies to secure funding quickly and easily.
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