Inventory financing is a line of credit using inventory as collateral and is typically used by (but not limited to) automobile dealers (including truck, RV and motorcycle) and manufacturers of consumer products. Dealers and manufacturers have large amounts of money tied up in inventory and both industries benefit from Inventory financing.
Inventory financing also benefits start ups, distributors, resellers and retailers that are striving to maintain and increase inventory sale rates while growing their business and improving profitability. Inventory financing also provides cash flow solutions to season fluctuations for some businesses during the holiday season.
How Does Inventory Financing work? Inventory financing is part of a production cycle of buying, making and selling inventory. An example: Automobile Dealer ABC wants to increase its inventory and needs to purchase it from the car manufacturer. Since vehicles are expensive, the dealer gets a loan based on the value of the vehicles. When the vehicle is sold, the dealer pays a portion of the loan related to the vehicle – or the dealer purchases more inventory to sell.
What Is Needed for Inventory Financing? You will need a good credit record, a business plan and a list of the inventory you want to finance, along with values. GMA Factor will give you an estimate of how much you can borrow on the inventory.
During Financing, while your inventory is waiting to be sold, you will need to keep track of it and make sure it is in good shape. GMA Factor has the right to inspect the inventory to make sure it has retained its value.
Who uses Inventory Financing? Types of industries that use this type of financing are: sellers, resellers, distributors, wholesalers, manufacturers.
We understand the importance of relationships. At GMA Factor, providing great service is more than just a promise. It’s the way we do business, every day, every client, and every transaction. We evaluate funding opportunities worldwide; our Management Team has over 30 years of experience in the global finance arena. To start the process, please feel free to contact us directly, fill out our quick application below and a finance specialist will contact you immediately.