STAND-ALONE INVENTORY FINANCE FROM $1MM TO $15MM - TRUE REVOLVING INVENTORY LINE OF CREDIT
An inventory line of credit is a type of financing specifically designed to help businesses manage and optimize their inventory levels. This revolving line of credit provides businesses with the flexibility to purchase inventory without tying up large amounts of capital.
The funds from an inventory line of credit can be used to purchase goods and materials, manage seasonal fluctuations in inventory demand, take advantage of bulk purchasing discounts, or bridge the gap between paying suppliers and generating sales revenue. This type of funding is particularly valuable for businesses with fluctuating inventory needs, such as retail, e-commerce, and manufacturing companies.
The amount of credit available is typically based on the value of the inventory, and as inventory levels fluctuate, the credit available also adjusts. This dynamic nature of the inventory line of credit makes it a valuable tool for businesses looking to efficiently manage their working capital and inventory costs.
Overall, an inventory line of credit can provide businesses with the financial flexibility and liquidity needed to effectively manage and grow their inventory levels, ultimately helping them to better meet customer demand and improve their bottom line.
Providing Revolving Lines of Credit to Businesses Selling to Other Businesses (B2B) or Direct to Consumers (D2C)
Inventory financing, at its core, is a form of asset-based lending in which the amount borrowed is determined by the value of your inventory. Typically, it will be a short-term loan or a line of credit; lenders will lend a percent of the inventory’s value. There’s usually no need for collateral since the inventory secures the loan. Inventory lines of credit work well for many industries, including: E-commerce, Retail, Consumer Goods, Distributors, Manufacturing, Food & Beverage, and more…
TRUE REVOLVING INVENTORY LINES OF CREDIT FROM $1MM-$15MM
FLEXIBILITY
A revolving line of credit allows you to better manage your working capital needs. No more scrambling to borrow at high costs to meet payroll expenses or to purchase supplies to fill orders.
TAILORED FACILITIES
We can tailor the loan sizes, maturity, and repayment terms to meet your needs. Our loans range from $1MM to $15MM and can be structured as interest-only revolving lines of credit.
NO HIDDEN FEES
We offer competitive rates & disclose all costs up front. We do not charge any management or servicing fees. No surprises.
PROMPTNESS
Receive a financing solution as fast as 24 hours after submitting the preliminary documents. Our expertise in the space allows us to quickly analyze and create a tailored solution based on your needs.
Industries that sell large amounts of inventory, such as retail, manufacturing, and wholesale, could benefit from a true revolving inventory line of credit for several reasons:
Seasonal Fluctuations: Many industries experience seasonal variations in demand for their products. For example, retailers may see increased sales during holiday seasons. A revolving inventory line of credit allows businesses to adjust their inventory levels based on fluctuating demand without the need for a new loan each time.
Cyclical Business Cycles: Some industries go through cyclical business cycles where demand for their products varies over time. Having a revolving line of credit helps these businesses manage their inventory levels more efficiently during both peak and off-peak periods.
Reducing Stockouts and Overstock: Maintaining an optimal inventory level is crucial for businesses. A revolving line of credit allows them to avoid stockouts by quickly restocking when inventory is low and also prevents overstock situations by scaling back during slow periods.
Flexibility in Purchasing: Businesses with a revolving inventory line of credit have the flexibility to take advantage of bulk purchase discounts or negotiate favorable terms with suppliers. This flexibility in purchasing can lead to cost savings and increased profitability.
Adaptability to Market Trends: Industries with rapidly changing market trends, such as fashion or technology, benefit from the ability to quickly adapt their inventory to meet evolving consumer preferences. A revolving line of credit provides the financial flexibility to stay competitive in fast-paced markets.
Mitigating Cash Flow Gaps: A revolving inventory line of credit helps businesses manage cash flow gaps that can occur between the time inventory is purchased and when sales revenue is collected. This is particularly important for industries with extended payment terms or slower inventory turnover.
Investment in Innovation: Industries that require constant innovation, such as technology or pharmaceuticals, can use a revolving line of credit to invest in research and development, launch new products, and adapt to market changes without straining their cash reserves.
Responding to Economic Changes: Economic conditions can impact consumer spending habits and overall demand. Having a revolving line of credit provides businesses with the financial agility to navigate economic uncertainties by adjusting inventory levels accordingly.
STAND-ALONE INVENTORY FINANCE
Why do I need it? If you are looking for a line of credit and are sitting on significant equipment or inventory, you can leverage those assets by securing an inventory line. Proceeds can be used for acquisition, unexpected expenses or for general working capital needs.
How does it work? We will evaluate the liquidation value of the equipment/inventory and assign a value. You can elect to draw down on the line at will, and only pay interest costs monthly, like a home equity line of credit. We will advance either the lower of cost or the Net Orderly Liquidation Value.
How much does it cost? As with all asset-based lending, the cost varies for each transaction. The monthly percentage is based on:
How liquid the inventory is (liquidation value)
Where its located (centrally vs spread out)
Whether or not its perishable, or fad related
Inventory financing is a good way to leverage existing goods for additional purchases. Unlike AR or PO, this functions more like a traditional line, with interest only payments until maturity for only the portion of principal you draw down.
How long does it take? From the time you submit the application and due diligence materials, it takes approximately a week to underwrite, after which an appraiser is sent to value inventory. To close the process takes approximately 3-4 weeks.
Submission/Approval Process? Initial submission for qualification consists of:
Completed and signed application
Current financials including AR aging and AP
Complete inventory list with locations
Once this is all received and evaluated, LVRG will issue the client a term sheet and closing list. LVRG offers True Revolving Inventory Lines of Credit from $1,000,000 to $15,000,000.
In summary, a true revolving inventory line of credit provides businesses with the financial flexibility to adapt to changing market conditions, optimize inventory levels, and strategically invest in opportunities, ultimately contributing to improved overall operational efficiency and profitability.