Wayflyer alternatives in 2026: Best financing options for CPG brands

Posted on by Erik

Key takeaways

  • Wayflyer is a revenue-based financing provider designed for e-commerce and SaaS businesses, offering repayment tied to revenue.
  • The best Wayflyer alternative depends on your business model. Some brands need revenue-based capital for ad spend, while others need funding aligned with inventory cycles.
  • Many high-growth e-commerce sellers explore alternatives when scaling, because continuous repayment schedules don’t always align with inventory cycles or wholesale payments.
  • Alternatives like Kickfurther match payment obligations to inventory sell-through, which better matches how e-commerce and CPG businesses generate cash.
  • If your brand is scaling across Shopify, Amazon, or B2B wholesale, choosing the right financing structure can improve working capital efficiency, total cost of financing, and growth velocity.
  • In 2026, the biggest shift in e-commerce financing is the move toward cash-flow-aligned funding models.

What is Wayflyer (and how does it work)?

Wayflyer is a revenue-based financing provider for DTC brands and e-commerce businesses. It gives sellers upfront capital—typically for ad spend, inventory, or growth initiatives—and collects repayment as a percentage of daily revenue.

Here’s the core structure:

  • You receive a lump sum
  • You repay through a fixed percentage of sales
  • There’s a fixed fee instead of a traditional interest structure
  • Repayment continues until the total amount is collected

This model is popular with:

  • Shopify and WooCommerce brands
  • SaaS and digital businesses
  • High-growth e-commerce sellers running paid acquisition

It’s designed for speed and flexibility, but that flexibility comes with tradeoffs.

Why founders look for alternative forms of capital

Revenue-based financing solved a real problem when it emerged: getting capital fast, without giving up equity or waiting weeks for traditional underwriting. But as brands scale, the same structure that made it accessible can start to feel like a constraint. That’s when founders start looking at other options.

Here are the four most common reasons brands explore alternative forms of capital:

1. Cash flow pressure from continuous repayments

The thing with repayments is that they happen regardless of the revenue coming in. That can create pressure when:

  • Inventory hasn’t sold yet
  • Margins are tight
  • Growth requires reinvestment

2. Misalignment with inventory cycles

Revenue-based models work best when revenue turns quickly. But most e-commerce and CPG brands deal with:

  • 60–120 day production cycles
  • Delayed wholesale payment terms
  • Seasonal demand spikes

That creates a mismatch between when you pay and when you actually generate cash.

3. The ad spend vs. inventory tradeoff

Many founders use revenue-based financing to fund ads and then run into a bottleneck:

  • Ads drive demand
  • Inventory can’t keep up
  • Cash gets pulled out before you can restock

4. Limited visibility into total cost

The “fixed fee” model sounds simple, but:

  • Effective cost depends on repayment speed
  • Faster growth can mean higher real cost
  • Slower periods extend repayment timelines

For brands that hit these patterns, the next question is whether a different structure better matches how your business actually generates cash.

Financing options for e-commerce and B2B brands: pros and cons by category

The right financing option comes down to one question: what are you trying to fund, and when do you get paid back? Each model below answers that question differently.

1. Wayflyer (revenue-based financing)

A revenue-based financing provider that promotes fast capital, sometimes in as little as 24 hours. Repayment is collected as a percentage of daily revenue until the total amount (including fees) is paid back.

Pros:

  • Fast funding
  • Underwriting with minimal paperwork
  • Repayment flexes with revenue

Cons:

  • Continuous repayment pulls cash out daily
  • Effective cost can rise if you grow quickly
  • Built for ad spend more than inventory cycles

Best for: E-commerce brands funding paid acquisition with short revenue cycles.

2. Kickfurther (inventory funding)

A marketplace-based model where inventory is funded upfront by a community of Buyers, and payments are owed when inventory sells. No fixed monthly payments—payment is tied to actual sell-through.

Pros:

  • Payment aligned with sell-through, not daily revenue
  • Working capital stays free for marketing and operations
  • Scales with actual sales velocity and supports long production cycles

Cons:

  • Requires demonstrated product demand
  • Only suited for physical goods, not digital products or services

Best for: CPG and inventory-heavy e-commerce brands managing wholesale orders, seasonal inventory, or long production timelines.

3. Shopify Capital and Stripe Capital (platform financing)

Built-in financing is offered by platforms based on the merchant’s existing sales data. Repayment is automatically deducted as a percentage of sales.

Pros:

  • Seamless integration with the platform
  • Fast approvals based on existing sales data
  • No separate application or underwriting

Cons:

  • Only available to merchants on that platform
  • Still uses revenue-based repayment
  • Limited flexibility outside the platform ecosystem

Best for: Shopify-native or Stripe-native sellers who want frictionless funding tied to their existing sales data.

4. Clearco (revenue-based financing for marketing spend)

A revenue-based financing provider for DTC and e-commerce brands. As of late 2025, Clearco offers two products: Rolling Funding (ongoing capital you repay as you go) and Invoice Funding (covers time-sensitive vendor bills, including inventory orders, with capped weekly payments).

Pros:

  • Built for scaling ad spend and paid acquisition
  • Flexible repayment tied to revenue
  • Fast approvals

Cons:

  • Repayment is still tied to revenue rather than sell-through
  • Capped weekly payments mean cash goes out on a schedule, not when stock sells
  • Best fit is still growth and acquisition spend, even with inventory coverage added

Best for: Brands scaling paid acquisition that also want short-term coverage for vendor or inventory invoices.

5. Traditional lenders or line of credit

Bank loans and credit lines with fixed repayment schedules and traditional interest structures. Typically the lowest cost of capital for businesses that qualify.

Pros:

  • Lower cost of capital for established borrowers
  • Predictable repayment terms
  • Builds business credit over time

Cons:

  • Stricter qualification criteria for early-stage businesses
  • Extensive documentation and underwriting requirements
  • Fixed payments due regardless of business performance

Best for: Established brands with strong financials, predictable revenue, and the ability to manage a longer approval process.

6. Purchase order financing

Funding tied to a specific confirmed order, typically a large wholesale or retail purchase order. The lender pays the supplier directly, and the brand repays from the resulting invoice.

Pros:

  • Lets you fulfill orders larger than your cash on hand
  • Risk is well-defined because it’s tied to a specific PO
  • Can be approved quickly once the PO is verified

Cons:

  • Transaction-specific, not ongoing working capital, requires a PO
  • Less flexible for general operational needs
  • Often higher cost than traditional credit lines

Best for: Brands with confirmed wholesale or distributor orders that need short-term funding to fulfill them.

7. Other alternatives: Capchase, 8fig, and Fundbox

Three other capital providers worth knowing about, each fitting a specific use case:

  • Capchase: Revenue-based financing built for SaaS and subscription-based digital businesses. Advances future recurring revenue as upfront capital, with repayment tied to ongoing subscription income.
  • 8fig: AI-powered e-commerce financing designed around supply chain planning, now owned by Bizcap (acquired late 2025) but operating under its own brand. Funding is delivered in installments aligned with cash flow needs, with repayment tied to sales.
  • Fundbox: Business credit lines and invoice-based funding for small businesses. Offers quick capital decisions and fixed weekly payments over 12–24 month terms, though credit limits are typically smaller than other options on this list.

Best for: Capchase fits subscription businesses, 8fig fits e-commerce sellers planning supply chain spend, and Fundbox fits smaller, broader working capital needs.

For most CPG brands, the shift toward alternative funding happens when growth stops being about traffic and starts being about inventory velocity.

Comparing financing providers at a glance

Option Funding type Repayment structure Best for Key limitation
Wayflyer Revenue-based financing % of daily revenue Ad-driven e-commerce growth Cash flow pressure
Kickfurther Inventory funding Pay as inventory sells CPG & inventory scaling Requires product demand
Shopify Capital Platform financing % of sales Shopify sellers Platform lock-in
Stripe Capital Platform financing % of payments Stripe-native sellers Platform lock-in
Clearco Revenue-based financing % of revenue Paid acquisition scaling Continuous repayment
Bank LOC Credit line Fixed schedule Established businesses Longer approval process
PO financing Order-based funding Paid from invoice Wholesale orders Requires a PO
Capchase Revenue-based financing % of recurring revenue SaaS & subscription-based brands Not for inventory-heavy businesses
8fig E-commerce financing % of sales (installments) E-commerce sellers planning supply chain Still revenue-based repayment
Fundbox Business credit line/invoice funding Fixed weekly payments Small business working capital Lower credit limits

Which financing model fits your business?

When comparing funding options, while speed and approval are important factors, repayment alignment is not to be overlooked.

Choose revenue-based financing (Wayflyer, Clearco, Stripe Capital) if:

  • You’re funding ad spend or customer acquisition
  • Your revenue cycles are short
  • You can handle continuous repayment

Choose inventory-based funding (Kickfurther) if:

  • You need to scale inventory or production
  • Your cash is tied up in stock
  • You want repayment aligned with sell-through

Choose traditional financing if:

  • You qualify for low-cost capital
  • You can manage fixed repayment schedules
  • You can manage extensive documentation requirements and longer approval timelines

Wayflyer may be a fine financing option for e-commerce growth, but it’s not the right fit for every business model. As brands scale, the biggest constraint isn’t access to capital—it’s access to cash and how that capital is repaid.

The best Wayflyer alternative is the one that aligns with:

  • Your inventory cycles
  • Your cash flow timing
  • Your growth strategy

Choosing the best funding partner in 2026: questions to ask

Before signing up for any funding option, run through these questions. They surface the issues that most often cause friction after the capital arrives.

1. What am I actually funding, and is the rest of my operation ready for it?

Funding ad spend without enough inventory creates demand you can’t fulfill. Funding inventory without a path to drive demand creates stranded capital. The capital and the operation need to match.

2. Will this repayment stack on top of obligations I already have?

Stacking multiple repayment structures can quietly compound. Even if each one is manageable on its own, the combined cash outflow can strain working capital.

3. Does the repayment schedule match when my business actually generates cash?

This is the question most founders skip. A 24–48 hour funding decision feels fast, but the repayment structure and costs run for months. Make sure the timing aligns with your inventory cycles, payment terms, and seasonal patterns.

4. Am I optimizing for speed of approval or fit with my business?

Fast approvals don’t fix misaligned financing. The best option isn’t always the one that can fund the fastest; it’s often the one that will still be able to fund you in a way that works six months from now.

FAQs

What is the best Wayflyer alternative in 2026?

The best Wayflyer alternative depends on your business model. For e-commerce brands focused on inventory and physical products, inventory funding like Kickfurther is often a better fit. For SaaS or digital businesses, revenue-based financing providers like Clearco or Stripe Capital may be more aligned.

How does Wayflyer repayment work?

Wayflyer uses a revenue-based repayment model, where a fixed percentage of daily or weekly sales is collected until the total repayment amount (including fees) is reached. This creates flexible repayment, but it can also reduce available cash flow during high-growth periods.

Why do e-commerce sellers explore alternatives to Wayflyer?

Many e-commerce sellers explore alternatives because:

  • Continuous repayment schedules impact cash flow before inventory has converted to revenue
  • Scaling requires reinvesting cash into stock, not repayments
  • Total cost becomes less predictable when sales cycles are long or seasonal

Is revenue-based financing better than traditional business loans?

Revenue-based financing offers faster approvals, less paperwork, and flexible repayment tied to business performance. However, compared to traditional loans or lines of credit, it often has a higher total cost and can impact cash flow more frequently due to ongoing repayments.

What financing is best for e-commerce inventory?

For inventory-heavy e-commerce businesses, the best financing options are those that align repayment with inventory sales, not revenue collection. Inventory funding models allow brands to stock products, scale production, and pay only as items sell—reducing cash flow strain.

Can I use Wayflyer and another funding partner at the same time?

Yes, many businesses use multiple financing options (for example, revenue-based financing combined with inventory funding). However, combining providers can create overlapping repayment obligations, which may strain working capital and reduce flexibility.

How does Wayflyer compare to Shopify Capital and Stripe Capital?

All three use revenue-based financing, which means they share similar cash flow dynamics. The main differences:

  • Wayflyer is a standalone e-commerce provider with flexible revenue-based repayment
  • Shopify Capital is built into the Shopify ecosystem and limited to platform users
  • Stripe Capital is integrated with Stripe payments and follows a similar repayment structure

What is the difference between revenue-based financing and inventory funding?

Revenue-based financing collects a percentage of sales continuously, regardless of what the capital was used for. Inventory funding aligns payment specifically with product sell-through, making it more suitable for physical goods businesses with longer sales cycles.

Is Wayflyer a fit for early-stage startups?

Wayflyer can work for early-stage e-commerce startups with strong revenue traction, especially those investing heavily in ad spend. However, startups with limited cash flow or long inventory cycles may find a better fit with alternative financing options.

What should I look for in a Wayflyer alternative?

When evaluating alternatives, focus on:

  • Repayment timing (does it match your cash flow?)
  • Total cost and fee transparency
  • Speed of funding (24–48 hours vs. longer approvals)
  • Flexibility for scaling (inventory vs. marketing vs. working capital)
  • Impact on operations and growth

Alternative business lenders: A guide for small businesses financing inventory

Posted on by Erik

 Quick answer

Alternative business lenders are non-bank funding providers offering structures outside traditional bank loans, including revenue-based funding, purchase order financing, and inventory funding through consignment. For inventory-heavy CPG brands, the repayment timing of a funding option usually matters more than the headline rate.

If you’re searching for alternative financing for your product company, there’s a good chance your inventory needs are growing faster than your cash flow. I see a lot of brands hit the same wall: retailer demand is there, supplier invoices are due now, and traditional bank lending starts creating pressure before the product even sells.

Alternative financing businesses are non-bank lenders that offer structures beyond traditional bank loans, including revenue-based funding, purchase order financing, and consignment inventory financing.

For inventory-heavy brands, the biggest difference usually comes down to repayment timing. For example, with a consignment financing structure like the one provided by the alternative financing company, Kickfurther, payment aligns with how inventory actually moves through sell-through rather than following a fixed monthly schedule.

In this guide, I’ll break down the main types of alternative funding, how they differ, and what inventory-focused brands should compare before choosing one.

What counts as an alternative financing option for small businesses?

Alternative financing covers any funding option outside a traditional bank loan or standard line of credit.

A lot of small business owners assume all alternative lenders work the same way, but the structures are very different. Some focus on speed. Others focus on credit score flexibility. Some are tied directly to sales or inventory movement.

For brands managing physical products, those differences matter because repayment structure affects cash flow just as much as funding cost.

Here’s how the most common alternative financing options compare:

Funding model How it works Best fit Biggest downside
SBA loans Government-backed bank financing Established businesses with strong financials Slow approval process. Multiple documents required and potentially multiple personal guarantees.
Revenue-based funding Payments tied to a percentage of revenue E-commerce brands with strong sales volume Payments pressure margins, and the structure or contract often prevents working with other financing options.
Merchant cash advances Advance against future card sales Urgent short-term cash needs Effective APRs typically range from 40% to 350%. Often prohibits working with other financing options.
Online lenders Faster digital underwriting Businesses needing quick approvals Shorter repayment timelines and often small amounts available.
Purchase order financing Funds supplier production tied to POs Wholesale orders Can be transaction-specific, cut into margins, and you have to find a way to fund the inventory before receiving a PO.
Inventory funding through consignment Inventory is funded upfront, and payments only start when it is delivered and/or it sells Inventory-heavy CPG brands selling through multiple channels Requires accurate inventory forecasting

One reason alternative business lending has grown is that traditional bank financing often moves too slowly for brands dealing with fast inventory cycles. The global alternative financing market is projected to grow from $1.42 trillion in 2026 to $2.27 trillion by 2031, according to Mordor Intelligence. That’s roughly two to three times the pace of traditional commercial bank lending. It’s becoming more expensive for banks to hold certain loans, leaving a funding gap that non-bank providers are filling.

Why growing brands look beyond traditional business loans

Most brands start exploring alternative lending when they can no longer sustain their growth through traditional lenders, which creates operational pressure, stockouts, and urgency.

I usually see this happen when a brand lands a larger retail account, expands into wholesale, or suddenly needs more inventory than its current financing can support.

Inventory growth creates cash flow pressure

Inventory-heavy businesses have to spend cash long before revenue arrives from selling the inventory. This cycle is caused by needing to pay suppliers before the inventory is made, retailers purchasing inventory on net terms, causing payment delays, and failures to accurately forecast sell-through, which results in cash going into inventory just sitting in a warehouse.

Traditional bank financing may approve a loan based mostly on credit history and existing financials, but that doesn’t always reflect inventory velocity or retailer demand.

Fixed repayments create operational stress

This is where a lot of financing options start breaking down for brands.

With traditional lending, repayment usually starts immediately. That means founders are making fixed payments while inventory is still in transit, sitting in storage, or waiting for retailer sell-through. For seasonal brands, that timing mismatch can create serious working capital pressure.

Traditional business loans Inventory-aligned funding
Fixed monthly payments Payments tied more closely to sales
Credit-based limits Inventory-based purchasing power
Debt added to balance sheet May use consignment structures
Focus on borrower’s credit Focus on inventory movement

Why alternative funding models gained traction

Alternative financing for small businesses grew because founders wanted more flexible options. In my experience, brands usually care about:

  • Faster approvals
  • Flexible payment structures
  • Larger purchasing power
  • Preserving liquidity for marketing and hiring
  • Avoiding unnecessary dilution

Take a growing apparel and accessories brand built around baseball fans. They were dealing with the kind of challenges that come with fast growth: cash flow gaps, uneven inventory levels, and ordering delays. The long stretch between manufacturing and revenue was making it hard to keep up with customer demand.

The alternative financing provider, Kickfurther, was able to finance 100% of their inventory costs, totalling more than $700,000. Unlike a traditional lender, Kickfurther only requires the brand to pay a portion of their revenue back as the inventory sells, which allows the brand to invest in new product expansion, secure volume-order discounts, and lower their cost of goods sold, all without taking on debt or giving up equity.

How are alternative financing options like Kickfurther different from traditional banks?

The main difference between traditional banks and alternative financing is how they evaluate risk and structure repayment.

Traditional lenders typically rely heavily on:

  • Credit score
  • Time in business
  • Existing collateral
  • Debt service ratios

Alternative financing uses different underwriting models depending on the funding type. Some focus on:

  • Revenue trends
  • Inventory turnover
  • Purchase orders
  • Ecommerce sales velocity
  • Marketplace performance

That’s why alternative options can sometimes move much faster than traditional bank loans.

Traditional bank Alternative financing
Longer approval cycles Faster underwriting
Heavier documentation Streamlined applications
Fixed repayment terms Flexible structures
Credit-driven decisions Operational performance focus
Conservative lending limits Higher inventory purchasing power

That said, faster funding does not automatically mean better funding. I’d encourage founders to pay close attention to how repayment works, what happens if inventory moves slowly, and whether the financing option actually fits the brand’s sales cycle.

Why repayment timing matters more than most founders expect

Repayment timing usually has a bigger operational impact than headline funding cost.

A lot of founders focus first on rates or fees, which makes sense. But for inventory-heavy businesses, the real pressure often comes from when cash leaves the business.

What happens with fixed loan payments

With a traditional term loan or business line of credit, repayment often starts immediately. That can create situations where:

  • Inventory hasn’t arrived yet
  • Retailers haven’t paid invoices
  • Ecommerce sell-through is slower than projected
  • Seasonal inventory is still sitting unsold

Meanwhile, payments continue on schedule regardless of inventory movement.

What changes when payments follow sales velocity

Inventory-aligned funding changes the cash-flow dynamics because payments align more closely with sell-through. That structure can help brands:

  • Preserve liquidity longer
  • Reinvest cash into growth
  • Avoid stacking multiple financing products
  • Reduce pressure during slower inventory cycles

This is one reason some brands prefer purchase order financing or consignment-based inventory funding over traditional lending options.

Why inventory timing affects working capital

Working capital problems usually come from timing mismatches rather than lack of demand. I’ve seen brands with strong retailer relationships still struggle because cash gets trapped in inventory for too long.

Take a scaling food and beverage brand that dealt with this problem. As demand grew, they needed to keep more inventory in stock to avoid missed sales, but cash kept getting tied up in products that hadn’t yet sold through. The alternative financing provider, Kickfurther, funded the brand’s inventory, and their repayment structure let them pay back as the product moved. With stock consistently available, sales climbed significantly, and the team could focus on scaling instead of cash flow gaps.

Here’s what their founder had to say:

“

With all the backing our company has received we were able to keep up with demand by maintaining our level of inventory, thus helping us increase our sales, which has seen an exponential level of growth.

— Founder, food and beverage brand

Which financing model works best for inventory-heavy brands?

The best funding model depends on how your inventory moves, how quickly you get paid, and how predictable your sales cycles are. Different financing options fit different operational realities.

Fast-moving consumer products

Brands with predictable sell-through may prioritize flexible inventory funding, larger purchasing power, and faster reorder cycles. These businesses often benefit from funding models tied directly to inventory movement.

Seasonal inventory cycles

Seasonal businesses usually need flexibility more than speed. A fixed repayment schedule can create pressure if inventory sells later than expected.

Wholesale expansion

Large retailer POs can strain even healthy businesses. Purchase order financing and inventory-focused alternative funding options may help brands accept larger wholesale opportunities without draining operating cash.

Ecommerce reorder pressure

Ecommerce brands often reorder inventory before earlier cycles fully convert to cash. That creates a constant need for working capital.

Swoveralls ran into this exact problem. They had a large Amazon holiday order to fulfill, and the production and inventory costs to scale up for peak season were straining cash flow. Kickfurther funded 100% of the inventory, and the Co-Op payment structure let them pay it back as the product sold. They hit their holiday order and finished the year with 89% growth.

Are alternative business lenders expensive?

Some alternative lenders are expensive, but focusing only on headline cost can hide the bigger operational picture. I’d encourage founders to compare funding based on:

  • Repayment timing
  • Inventory velocity
  • Margin impact
  • Purchasing power
  • Operational flexibility

Why headline rates can be misleading

A lower-cost loan is not always operationally cheaper if repayment starts before inventory sells. That’s especially true for businesses with long manufacturing timelines, retail payment delays, or seasonal inventory swings.

The hidden cost of slow inventory turns

Inventory delays create costs beyond financing fees. Brands may lose:

  • Retail shelf space
  • Reorder opportunities
  • Marketing momentum
  • Supplier leverage

When higher-cost funding still creates more profit

Sometimes, a more flexible funding option allows a business to fulfill larger orders, increase sell-through, or maintain growth momentum. That doesn’t mean founders should ignore pricing. It means pricing should be evaluated alongside operational fit.

Kickfurther’s pricing reflects the consignment structure: Brands pay consignment income on the inventory as it sells, not on a fixed monthly schedule. For brands managing seasonal swings or long production cycles, that timing match often matters more than chasing the lowest advertised rate.

What should founders compare before choosing a lender?

The best financing option is the one that fits how your business actually operates. I usually recommend that founders compare these areas before signing any agreement.

  • Cash flow alignment. Does repayment match inventory sell-through or fixed calendar dates?
  • Supplier payment structure. Does the funding provider pay suppliers directly or reimburse after the fact?
  • Reporting requirements. How much operational reporting is required each month?
  • Inventory risk sharing. What happens if inventory sells more slowly than projected?
  • Balance sheet impact. Will the structure increase debt obligations or affect future financing conversations?
Question Why it matters
When does repayment start? Impacts working capital immediately
What happens if sales slow down? Determines operational flexibility
How are limits determined? Affects growth capacity
Does funding scale with inventory? Important for fast-growing brands
Are there hidden fees? Impacts total funding cost

How quickly can alternative funding companies approve inventory funding?

Alternative funding approvals are often faster than traditional bank financing because underwriting focuses more on operations and inventory performance. That said, timelines vary by funding model.

Bank underwriting timelines

Traditional bank financing can involve financial statement reviews, collateral evaluations, multi-stage approvals, and extensive documentation.

Online approval workflows

Some online lenders can approve funding within days. Those models usually prioritize revenue history, banking data, ecommerce performance, and business credit metrics.

What inventory-focused underwriting looks at

Inventory-focused funding providers often review sales velocity, inventory turnover, retail demand, supplier relationships, and gross margins. That operational focus can create more flexibility for growing brands than traditional business lending models.

Choosing the right alternative funding partner

The right funding partner should support growth without creating new operational problems. I’d encourage founders to look beyond marketing claims and evaluate how the funding structure works in practice.

Questions worth asking before signing

  • When do payments begin?
  • What happens if inventory sells slower than forecasted?
  • How are funding limits determined?
  • Does the provider understand inventory-heavy businesses?
  • Can the structure scale with growth?

Red flags to watch for

  • Unclear pricing
  • Aggressive sales tactics
  • No explanation of repayment timing
  • Heavy reliance on daily withdrawals
  • Limited flexibility during slower sales periods

Signs a funding model matches your operations

The best business financing options usually match repayment to sales cycles, preserve working capital, support inventory growth, improve purchasing flexibility, and reduce operational stress during scaling.

For inventory-heavy brands, that often matters more than finding the fastest lender or the lowest advertised rate.

FAQs

Can small businesses qualify for alternative funding with limited credit history?

Some alternative lenders place less emphasis on traditional credit score requirements and more focus on operational performance, revenue history, or inventory movement.

Do alternative lenders require collateral?

It depends on the financing option. Some require collateral or personal guarantees, while others use inventory, receivables, or sales performance as part of underwriting.

What’s the difference between inventory funding and a business line of credit?

A business line of credit provides revolving access to capital with scheduled repayment terms. Inventory funding is typically tied directly to inventory purchases and sell-through timing.

Can alternative funding help with retailer purchase orders?

Yes. Purchase order financing and inventory-focused funding models are often designed specifically for wholesale inventory production.

Is inventory funding considered debt?

Some inventory funding structures use consignment agreements rather than traditional debt. Kickfurther is one example — the Brand pays consignment income on inventory as it sells, so the funding doesn’t sit on the balance sheet as debt.

What financial metrics do alternative lenders review?

Depending on the lender, they may review revenue trends, gross margins, inventory turnover, retailer demand, cash flow, and business credit history.

Non-dilutive funding: How to raise capital without giving up equity

Posted on by Amanda Levine

As Kickfurther’s CEO, I’ve watched thousands of startup founders and growing consumer brands wrestle with the same question: how do you raise capital without giving up equity?

This guide to non-dilutive funding breaks down the most common non-dilutive funding options available to startups and growth-stage businesses today. We’ll cover how non-dilutive funding works, the different types of non-dilutive financing available, when each option makes sense, and how founders can access capital without giving up equity or sacrificing long-term ownership.

Quick answer

Non-dilutive funding is capital you access without giving up equity in your company. The main types include grants, venture debt, revenue-based financing, invoice factoring, purchase order financing, inventory funding, rewards-based crowdfunding, and bootstrapping. Each one has trade-offs around cost, eligibility, and how repayment works.

What is non-dilutive funding?

Non-dilutive funding is any form of capital you bring into your business without surrendering ownership. You don’t give up shares. You don’t add equity investors to your cap table. The percentage of the company you own stays the same after the funding as before. The term is often used interchangeably with ‘non-dilutive financing’.

That’s the simple definition. But here’s the part founders sometimes miss: non-dilutive doesn’t mean “no obligation.” Most non-dilutive vehicles have repayment terms, fees, or a cost of capital attached. The trade-off you’re making isn’t between paying and not paying. It’s between giving up equity (forever) and paying for capital in some other way.

What non-dilutive funding is not: equity or convertible debt financing of any kind. That includes priced rounds, convertible notes, and SAFEs. Convertible notes and SAFEs feel non-dilutive at first because no shares move on day one, but they convert into equity at the next round, so they’re really just deferred dilution. I’ll come back to that in the FAQs.

founder ownership erosion

Why are founders choosing non-dilutive funding right now?

Three reasons keep coming up in conversations with the founders we work with.

First, the venture market shifted hard after 2022. Deal terms tightened. Down rounds became more common. Founders who raised at peak valuations watched the math get ugly fast. According to data from  PitchBook, the median dilution per priced seed round still runs around 20 to 25%. Stack two or three rounds, and a founder’s stake can drop below 50% before the company hits scale.

Second, founders are doing the dilution math more carefully. If you sell 25 percent of your company today to fund a single inventory cycle, you’ve potentially given up 25 percent of every future dollar that company generates, forever. For a CPG brand growing at 30 to 50 percent a year, that math gets painful quickly.

Third, opportunities aren’t waiting. A locked-in retailer order, a 72-hour manufacturer discount, a seasonal restocking window, these don’t pause for an 8- to 12-week venture process or a similarly long bank approval. Founders are reaching for non-dilutive options because the ones that actually fit a CPG business (inventory funding, PO financing, RBF, factoring) close in days or weeks, not months. Capital that arrives after the opportunity has passed isn’t capital at all.

How does non-dilutive financing work?

Non-dilutive vehicles fall into four broad mechanics, and understanding them upfront makes the rest of this guide easier to navigate.

non dilutive mechanics quadrant

Debt. You borrow money and pay it back, usually with interest, on a fixed or amortized schedule. Bank loans, SBA loans, and venture debt fit here.

Grants. You receive capital that doesn’t have to be paid back, usually provided by the state or federal government or non-profits in exchange for hitting milestones, doing research, or operating in a specific category.

Revenue or asset-linked. Repayment is tied to the asset you’re funding or the revenue it generates. Revenue-based financing, invoice factoring, purchase order financing, and inventory funding all fall here.

Earned or prepaid capital. You fund growth from cash you already have or from customers who pay before you ship. Bootstrapping and rewards-based crowdfunding live here.

The “cost of capital” is the all-in price of the money—interest, fees, rates, equity-equivalent costs, whatever’s baked in. When you’re comparing options, always compare on cost of capital, not just headline rates.

8 types of non-dilutive funding

Here are the eight forms of funding that won’t dilute your stake in the business, including what each one is best for, and where the trade-offs sit.

1. Grants

Grants are capital you don’t repay, usually awarded by governments, foundations, accelerators, or industry groups. The U.S. Small Business Administration lists federal programs. State and local governments run their own. Industry programs exist for sustainability, women-owned businesses, veteran-owned businesses, and specific categories like food and beverage.

Best for: Research-heavy startups, social-impact businesses, specific industry categories

Typical size: $5,000 to $500,000 (some research grants go higher)
Cost of capital: Effectively zero, but the application work is real

Trade-off: Very competitive, slow timelines, often restricted in how funds can be used

2. Venture debt

Venture debt is term debt extended by a specialized capital provider to venture-backed companies, usually after an equity round. The capital provider uses the equity round as a credit signal. Repayment may fixed and amortized or it may operate more like a line of credit.

Best for: Venture-backed companies extending runway between rounds

Typical size: 25 to 35 percent of the most recent equity raise
Cost of capital: Roughly 10 to 15 percent all-in but often also requires warrants (which can cause dilution)

Trade-off: Requires venture backing first, may include warrants, strict covenants

3. Revenue-based financing

Revenue-based financing, or RBF, is capital you repay as a percentage of monthly revenue until a fixed multiple is hit. There’s no fixed monthly payment—when revenue is up, repayment is up; when revenue dips, repayment dips.

Best for: Software, ecommerce, and subscription businesses with predictable monthly revenue

Typical size: 3 to 6 times monthly revenue
Cost of capital: Effective rates often 20 to 40 percent annualized

Trade-off: Usually requires consistent monthly revenue ($15K minimum is common); can be expensive for slow-growing businesses

4. Invoice factoring

Invoice factoring is when you sell unpaid invoices to a factor at a discount in exchange for cash today. The factor collects from your customer when the invoice comes due.

Best for: B2B businesses with creditworthy customers and 30- to 90-day payment terms

Typical size: 70 to 90 percent of invoice value upfront
Cost of capital: 1 to 5 percent of invoice value per month

Trade-off: the factor underwrites your customer, not you. And most factoring agreements restrict what other financing you can take on, so read the covenants before you sign.

5. Purchase order (PO) financing

PO financing advances capital against a confirmed purchase order so you can fulfill the order. The financer pays your supplier directly, then gets repaid when your customer pays you.

Best for: Businesses with a confirmed PO from a creditworthy buyer but not enough cash to produce

Typical size: Up to 100 percent of supplier costs
Cost of capital: 1.5 to 6 percent per month of PO value

Trade-off: Requires a verifiable PO from a strong buyer; doesn’t solve broader cash flow, may cause friction in the relationship with PO-issuer or signal weakness to them.

6. Inventory funding

Inventory funding is capital tied directly to an inventory order. Several vehicles fit here—asset-based loans, traditional inventory loans, and consignment-style marketplace models.

This is the lane we work in, so I’ll be direct about how Kickfurther approaches it. On our marketplace, brands fund up to 100 percent of an inventory order upfront. Payments begin as inventory sells. We structure it as a consignment model rather than a traditional loan structure. Many brands use Kickfurther to access inventory capital without taking on traditional term debt.

How Kickfurther helps

Kickfurther uses a consignment funding model designed specifically for inventory-heavy consumer brands. A CPG brand with proven sell-through can fund a full production cycle on the Kickfurther marketplace. Kickfurther is designed to move faster than many traditional financing processes, and payments are tied to actual inventory sales, meaning the payment structure more closely aligns with the cash-flow realities of CPG brands rather than a bank’s fixed monthly payment obligations.

Best for: CPG brands with proven sell-through, inventory-heavy businesses, founders protecting equity and personal assets

Typical size: $150,000 average Co-Op size

Cost of capital: Co-Op costs vary by structure and sales expectations and include a funding fee structure that varies based on the opportunity and sales expectations.

Trade-off: Designed for physical-product businesses; not a fit for software or services

7. Crowdfunding (rewards-based)

Rewards-based crowdfunding (Kickstarter, Indiegogo) is when supporters pre-pay for a product before it ships. You’re effectively selling future inventory at a discount in exchange for early cash.

Best for: New product launches, brands with a strong story, consumer products with broad appeal

Typical size: $10,000 to $1M+ per campaign
Cost of capital: Platform fees (5 to 8 percent) plus payment processing

Trade-off: Requires marketing horsepower; you owe product to backers regardless of how production goes, often make little to no profit for initial inventory run.

8. Bootstrapping and customer prepayments

Bootstrapping is funding growth from operating cash flow. Customer prepayments—annual contracts, deposits, retainers—are a close cousin. Both keep your cap table completely clean.

Best for: Profitable businesses, service businesses, businesses with leverage to ask for prepayment

Typical size: Whatever your business generates
Cost of capital: Zero, plus the opportunity cost of slower growth

Trade-off: Caps growth speed; can leave you exposed if a major opportunity needs more capital than you have on hand, usually requires recycling almost all free cash back into the business in lieu of taking a paycheck.

Benefits of non-dilutive capital

Here’s what founders actually get when they choose non-dilutive options:

  • You keep your equity. Every share you don’t sell today is a share you can sell later—at a higher valuation, in a more competitive process, or never at all if you’d rather hold.
  • You keep decision-making control. No board seats, no investor approval rights on key decisions, no quarterly reporting cycles aimed at hitting a venture-style growth curve.
  • You can match the capital to the use case. Inventory cash for inventory cycles, grant money for R&D, factoring for receivable gaps. Equity is one-size-fits-all; non-dilutive is tailored.
  • The right vehicle aligns with your cash cycle. A well-structured non-dilutive option aligns payments with when the business generates sales. That’s especially true for revenue-linked and inventory-linked structures.
  • You protect personal assets when the structure allows. Some non-dilutive options (Kickfurther included) come with no personal guarantees. Others (most bank loans) still require them, so read the terms.

Trade-offs and benefits of non-dilutive funding

Non-dilutive isn’t a free lunch. The honest trade-offs:

  • Funding costs can run higher than equity in any single period. Equity is “expensive” in the long run because of dilution, but the in-period cash cost can be lower than RBF, factoring, or merchant cash advances.
  • Eligibility is real. Most non-dilutive vehicles need revenue history, time in business, or a specific asset (a PO, inventory, an invoice) to anchor the deal. Pre-revenue startups have fewer options.
  • Some structures still require personal guarantees. Traditional bank loans, SBA loans, and many venture debt deals do.
  • Timing mismatches happen. A revenue-based financing deal with monthly amortizing repayments can choke a CPG brand whose cash comes in seasonally. Match the repayment shape to your cash-flow shape.
Dilutive (equity) Non-dilutive
In-period cash cost Lower Variable
Long-term cost High (forever-dilution) Bounded
Founder control Reduced (board, votes) Preserved
Speed to close Months Days to weeks
Eligibility Story-driven Revenue/asset-driven
Repayment None Required (most types)

Is non-dilutive funding right for your business?

I use a four-question framework with founders trying to decide:

  • Do you have revenue, an asset, or a PO to anchor a deal? If yes, non-dilutive options open up. If no, equity or grants are usually the path.
  • What are you funding? Capital should match the use case. Inventory cycles want inventory funding. R&D wants grants or venture money. Marketing experiments want flexible capital like RBF or a line of credit.
  • How sensitive are you to dilution? If you’ve already given up 30 to 40 percent across earlier rounds, the case for non-dilutive going forward gets very strong.
  • What’s your timing? If you need capital in 30 days, equity is rarely the answer. Most non-dilutive vehicles can close faster.

There are still cases where equity is the right call—high-burn, pre-revenue, deeply technical businesses where the company can’t generate cash for years. The point isn’t to avoid equity at all costs. It’s to avoid using equity for things non-dilutive options can fund.

How to choose the right non-dilutive financing option

Once you’ve decided non-dilutive makes sense, the next question is which one. Here’s the rough decision tree I’d walk through:

  • R&D-heavy or scientific work → Grants first, then venture debt if you’ve raised already
  • Software / SaaS with monthly revenue → Revenue-based financing
  • B2B with slow-paying customers → Invoice factoring
  • Confirmed PO you can’t fulfill → Purchase order financing
  • CPG / physical-product brand needing inventory → Inventory funding
  • New product launch with audience → Rewards-based crowdfunding
  • Profitable, just need to manage timing → Bootstrapping with disciplined cash management

For CPG and inventory-heavy businesses, the common cash-flow gap goes like this: production takes 3 to 5 months, distributor payment terms run 60 to 90 days, and a bank will fund maybe 50 percent of the order if they fund it at all. That math doesn’t work for a growing brand.

That gap is the reason we built Kickfurther the way we did. On our marketplace, brands can secure up to 100 percent of an inventory order upfront, make payments as inventory sells, and don’t sign a personal guarantee. It’s not the right tool for every business—but for a CPG brand fighting the inventory-cash mismatch, it’s purpose-built.

“

Kickfurther was the perfect inventory capital solution to allow us to keep up with rapidly increasing demand for our products. The Kickfurther team has been wonderful to work with and has made the funding process seamless—it’s been pivotal to our success.

— Heide Iravani & Emily Clifford, Co-founders, Piccolina

Frequently asked questions

Is non-dilutive funding the same as a loan?

No. A loan is one form of non-dilutive funding, but the category is broader. Grants, revenue-based financing, factoring, inventory funding through a consignment-based inventory model like Kickfurther, and rewards-based crowdfunding all qualify as non-dilutive—and most of them aren’t structured as loans.

What’s the difference between non-dilutive and dilutive funding?

Dilutive funding (priced equity rounds, convertible notes, SAFEs) gives investors ownership in your company in exchange for capital. Non-dilutive funding doesn’t. The trade-off typically comes through fees, payment timing, qualification requirements, or operational obligations rather than ownership dilution.

Can early-stage startups qualify for non-dilutive funding?

Some non-dilutive options are open to early-stage startups, but the menu is narrower. Grants, accelerators, rewards-based crowdfunding, and customer prepayments are usually accessible pre-revenue. Most other non-dilutive vehicles require revenue history, a confirmed purchase order, or an asset to anchor the deal.

Is non-dilutive funding cheaper than venture capital?

It depends on the time horizon. In any single period, equity has no cash cost. Over the life of the company, equity is usually the most expensive form of capital because dilution compounds across rounds. Non-dilutive vehicles charge cash today but don’t chip away at your ownership. For most CPG founders, the long-term math favors non-dilutive.

Do I need revenue to qualify for non-dilutive funding?

For most types, yes. Revenue-based financing, factoring, and most inventory consignment models need at least some revenue history. Exceptions include grants, accelerator awards, and rewards-based crowdfunding, which can work pre-revenue.

What types of businesses benefit most from non-dilutive funding?

Inventory-heavy CPG brands, profitable software companies, B2B businesses with slow-paying customers, and brands with strong audiences and new products to launch. The common thread is having something concrete (revenue, inventory, a PO, an audience) to anchor the deal.

Is government grant money truly non-dilutive?

Yes. Federal, state, and local grants often don’t take equity and don’t require repayment when the terms are met. The catch is restrictions on use, milestone reporting, and competitive application processes. Read the conditions carefully.

Can you combine non-dilutive funding with equity financing?

Yes, and most well-capitalized companies do. Equity for the things only equity can fund (long R&D timelines, high-burn periods), non-dilutive for the things non-dilutive does well (inventory, receivables, revenue-tied growth). The point is to use each tool for what it’s built for.

How does Kickfurther’s inventory funding work for a CPG brand?

A CPG brand creates a Co-Op on the Kickfurther marketplace, describing the inventory order—units, supplier, sales channels. Kickfurther facilitates consignment opportunities that help brands secure inventory upfront. The brand uses the funds to produce or purchase inventory, sells through their channels, and pays as inventory sells. Many brands use Kickfurther to align inventory payments more closely with sales cycles while keeping working capital available for growth.

How fast is non-dilutive funding compared to a bank loan?

Most non-dilutive options close faster than a traditional bank loan. Bank approval can take six to twelve weeks for a small business. RBF, factoring, PO financing, and marketplace inventory funding (Kickfurther included) typically close in days to a few weeks. Speed is one of the bigger reasons founders choose non-dilutive when an opportunity is time-sensitive.

What is consignment financing and how does it work?

Posted on by Amanda Levine

By: Erik Straub, Co-Founder and Head of Product at Kickfurther

Consignment financing is a model where one party receives inventory (or the capital to produce it) upfront and pays the other party who provided the inventory or the payment to create it when the inventory sells. It’s used by consumer packaged goods (CPG) brands that need inventory and working capital tied to their actual sell-through, not to a fixed monthly schedule.

At Kickfurther, we built our entire consignment financing model around this idea so brands don’t pay until their products move.

Since co-founding Kickfurther, I’ve talked to hundreds of consumer brands, and the same pattern shows up at almost every growing CPG company I talk to: the need for cash to pay your manufacturer arrives long before the cash you’ll earn from selling that inventory. That timing gap is the single biggest reason scaling brands stall, take on debt they regret, or hand over equity they didn’t have to.

Consignment financing is one of the cleanest ways to close that gap. In this post, I’ll walk through how it actually works, what it costs, who it fits, and how it compares to the other funding options on the table—plus how Kickfurther’s version of the model works in practice.

How consignment financing works

Consignment has been around for decades in retail stores. In a traditional consignment arrangement, a store agrees to stock a product but doesn’t pay for it until the product is purchased by a customer. The risk shifts off the store and onto the brand or the funder.

Consignment financing applies the same concept to inventory funding. Instead of a brand paying out of pocket (or taking on debt) to produce a purchase order, a third party funds the inventory upfront. The brand only pays the funder back as the inventory sells.

The basic flow, from start to finish

Here’s what it looks like step by step:

  1. A brand identifies an inventory order it needs to produce. Say, a wholesale PO, a seasonal restock, or a volume-buy from a supplier.
  2. The funder reviews the brand’s financials, sales history, and the specific order.
  3. Once approved, the funder pays the manufacturer (or the brand) directly to produce or purchase the inventory
  4. The brand receives the finished inventory and sells it through its normal channels, such as DTC, wholesale, retail, and marketplaces.
  5. As inventory sells, the brand pays the funder back on a schedule tied to actual sales, plus a pre-agreed cost of capital.

The key thing to notice here is that repayment is anchored to sell-through, not to a calendar.

Brand, lender, supplier: Who’s all involved

There are usually three parties in a consignment financing arrangement:

  • The brand: the company that needs inventory and will sell it to end customers.
  • The funder (lender): a marketplace, fintech platform, or specialty financing entity that supplies the upfront capital.
  • The manufacturer or supplier: the party producing the goods, who often gets paid directly by the funder.

Some models add a fourth party: the end retailer or distributor, especially when the inventory is being sold into wholesale channels with their own payment terms.

Example: Snack brand needs financing help

Imagine a snack brand needs to fund a $200,000 production run for an initial launch with a retailer. The retailer pays on net-90 terms.

Without consignment financing, the brand has two bad options. Pay the manufacturer out of cash and starve every other line item for three months, or take a bank loan that funds roughly half the order and starts requiring monthly payments before the retailer has even paid its first invoice.

With consignment financing, the brand can fund the full $200,000 upfront, ship to the retailer, and start paying the funder back from the same revenue the inventory is generating. Cash flow stays aligned with the actual business, instead of fighting against it.

consignment financing flowchart

Who is the best fit for a consignment model?

Consignment financing isn’t for everyone. It’s purpose-built for businesses that have inventory at the center of their P&L and strong, reliable sales.

CPG brands with seasonal or volume-driven cycles

The clearest fit is a CPG brand whose production cycle is longer than its sales cycle. Food, beverage, beauty, personal care, apparel, supplements, household goods—anything where you commit cash to a manufacturer months before that inventory turns into revenue.

Seasonal brands feel this gap most acutely. One of our customers captures it well:

“

Our business is highly seasonal, with peak demand spanning from Black Friday through Valentine’s Day. It can be tough to meet demand during our peak with a 5-month purchasing cycle. The flexibility of using funds without immediate repayments allowed us to manage our cash flow more effectively and focus on growing our business.

Brands with proven sell-through

Most consignment financing providers want to see real revenue, not a pitch deck and a dream. The whole model depends on inventory selling, and funders want evidence of this.

Generally, that means a brand with at least 12 months of sales history, predictable channel performance, and clean unit economics. The more data the funder has on how fast your products turn, the more comfortably they can fund larger orders.

At Kickfurther, for example, we can fund any brand with more than $400K in trailing 12-month revenue, or over $200K if they have POs from large retailers.

When consignment inventory financing isn’t the right fit

It’s not the right tool for every business. A few situations where I’d point founders elsewhere:

  • Pre-revenue or pre-product brands. If you’re still validating, you need venture capital or a small business grant, not inventory funding.
  • Service businesses. No inventory = no consignment financing.
  • Brands with thin margins. If your contribution margin is tight, the cost of capital can erode whatever buffer you have. Be honest about the math.
  • Brands looking to fund non-inventory expenses. Marketing, payroll, software, R&D. That’s a different problem that requires a different funding source. Having said that, a brand can use Kickfurther’s inventory funding to be reimbursed for inventory they’ve already purchased and then use that new cash flow to put towards other business activities.

What does consignment financing cost?

This is the question every founder asks first, and it deserves a straight answer.

How costs are typically structured

Consignment financing isn’t usually quoted as an annual percentage rate. It’s quoted as a fixed cost of capital on a specific funding amount over a specific term. So a brand might agree to pay back $210,000 on $200,000 of funding over a six-month sell-through window.

That fixed structure is actually one of the things founders like about it. You know the total cost upfront. You aren’t watching a variable interest rate creep, and you aren’t on the hook for compounding charges if things take longer than expected.

Why it isn’t quoted as an interest rate

A traditional loan amortizes over a fixed term with fixed monthly payments, regardless of what your business is doing. An interest rate is the right way to describe that arrangement.

Consignment financing repayment is tied to inventory selling. Some months you might pay back more, some months less, and the total cost is set at the start. Stamping an APR on that mechanic would be misleading; the math doesn’t behave like a loan.

Comparing total cost to other funding types

Apples-to-apples comparison takes a little work, but here’s the framing I use with founders:

  • Versus a bank loan, consignment financing usually costs more in absolute dollars, but it covers a larger share of the order, doesn’t require monthly payments before revenue lands, and doesn’t put personal assets on the line.
  • Versus equity, it’s almost always cheaper. Giving up 10% of your company to fund a single inventory cycle is a permanent cost. Consignment financing is one-and-done per order.
  • Versus a merchant cash advance or factoring, consignment financing is often cheaper and more transparent, with no daily debits or hidden fees.

If you want a deeper look at how this stacks up against the most common alternatives, our team has a longer comparison post on purchase order financing versus inventory financing that breaks the math down further.

How is consignment financing different from a traditional loan?

This is where the model separates itself. A loan is a contractual obligation to pay a fixed amount on a fixed schedule, secured by something, usually personal assets. Consignment financing is structured differently in three meaningful ways.

No fixed monthly payments

A bank loan often starts charging you the month after you sign. If your inventory hasn’t shipped yet, that doesn’t matter—the payment is due. Consignment financing repayment is tied to your inventory sales. If sales ramp slowly, generally, repayment ramps slowly. If sales are faster, you pay it off faster.

How it’s treated on the balance sheet

A loan is debt. It sits on your balance sheet, eats into your debt-to-equity ratio, and shows up every time another lender or partner runs your numbers. Consignment financing is structured around the inventory itself rather than as a debt obligation, so it doesn’t load up the balance sheet the same way. That matters when you’re trying to stay attractive to future funding partners or acquirers.

For a fuller breakdown of why founders increasingly look outside traditional debt and equity, our team wrote about why you should consider non-dilutive funding earlier this year.

Consignment financing vs. other inventory funding options

Founders rarely choose consignment financing in a vacuum. Here’s how it stacks up against the other tools on the table.

Funding type % of order funded upfront Repayment trigger Typical time to fund
Consignment financing Up to 100% Inventory sell-through 1–4 weeks
Bank loan / line of credit Roughly 50% (typical) Fixed monthly schedule 4–12 weeks
Purchase order financing 70–90% (typical) Customer payment 1–3 weeks
Revenue-based financing Varies Daily/weekly % of revenue 1–2 weeks
Equity funding Up to 100% (cash) None (permanent) 3–9 months
Credit cards / personal credit Limited by credit line Fixed monthly schedule Immediate

Bank loans and lines of credit

Banks remain the cheapest source of capital on paper, but the headline rate is only part of the picture. According to the Federal Reserve’s 2024 Small Business Credit Survey, only about half of small business loan applicants received the full amount they requested, and the typical inventory-secured bank product only funds roughly half the order value. Combine that with personal guarantees and amortization that starts immediately, and the actual fit is often poor.

Purchase order financing

PO financing is consignment financing’s closest cousin. It funds a specific PO, usually pays the manufacturer directly, and gets repaid when the customer pays. The biggest practical difference is that PO financing is only available if you have existing purchaser orders in an amount large enough to cover your supply run, and PO financing is usually capped at a percentage of the order, while consignment financing doesn’t require a PO and can fund the full amount. We have a side-by-side breakdown of how the two models differ in our post on inventory financing for CPG brands.

Revenue-based financing

Revenue-based financing pulls a fixed percentage of your top-line revenue every day or week until the amount charged is repaid. It’s flexible compared to a loan, but it’s tied to all of your revenue, not just the inventory cycle the funding paid for. For seasonal brands or brands with multiple product lines, that can feel like death by a thousand paper cuts.

Equity or Convertible Debt funding

Equity can be the most expensive money you’ll ever take, even though it doesn’t feel that way upfront. Generally, you will have to give us some percentage of your company (and still potentially pay interest) for this type of funding. While you might not pay anything out of pocket up front (other than legal fees, which, themselves, can cost tens of thousands of dollars), you will own less of your company moving future, which means the repayment pain will be felt anytime your company makes a distribution or pays dividends and when it sells.  Consignment financing covers the same gap, costs you only the agreed cost of capital, and leaves your cap table intact.

How do you qualify for consignment financing?

Most providers run a similar diligence playbook. Here’s what to expect.

Revenue and operating history

You’ll generally need 12+ months of sales, predictable monthly revenue, and a clear track record of inventory turning. Different providers have different minimums—some start at $100K in annual revenue, others want $1M+. Plan to share at least a year of bank statements, sales reports, and accounting data.

Inventory health and margins

Funders want to see that the specific inventory they’re funding will sell. That means SKU-level performance data, sell-through rates, and gross margins are healthy enough to cover the cost of capital with room to spare. If you’ve had a recent stockout, that’s actually helpful—it shows demand outstripping supply.

Documentation you’ll need

Plan to share:

  • Two to three years of profit and loss statements
  • Recent bank statements (typically 6–12 months)
  • Sales reports by channel and SKU
  • The specific PO or production order you want funded
  • Manufacturer or supplier quote and timeline
  • Existing inventory and accounts receivable summary

The better your data hygiene, the faster the underwriting.

How Kickfurther’s consignment funding model works

Now, the part where I’ll talk specifically about what we do. We built Kickfurther because, as operators ourselves, we kept seeing brands hit the same wall: the bank-funded half was too small, the equity offer cost too much, and nobody had a model that actually matched how a CPG business burns and earns cash.

100% upfront funding for your inventory order

Most traditional providers fund a slice of your order. We fund up to 100%. That means if your manufacturer needs $200,000 to produce, you can have $200,000 wired to them, not $100,000 plus a scramble for the rest.

A marketplace of Buyers funds your Co-Op

We don’t fund Co-Ops off our balance sheet. Instead, we built a marketplace of Buyers—people who participate in funding inventory through Kickfurther. When your Co-Op goes live, Buyers fund it collectively.

This structure is the reason we can fund the full order.

You pay as inventory sells through

Repayment is the part founders tell me they appreciate most. There’s no monthly amortization. You can pay us back from the same revenue the inventory generates, and you set sales estimates. If sales come in faster, you finish faster. If they take a little longer, the structure has flexibility.

“Coffee lots will go on sale. A farmer might call with lots of coffee at a certain price but we can’t necessarily jump on it because we don’t have the cash flow. This limits broadening our scope of coffee offerings.” — Sarah, Underground Coffee

That’s the kind of moment consignment financing exists for. Capital that arrives when the opportunity does, repayment that arrives when the revenue does. See if Kickfurther is a fit for your business.

FAQs

Is consignment financing considered debt?

It’s structured differently from a traditional loan. Because repayment is tied to inventory sales rather than a fixed amortization schedule, and because providers like Kickfurther don’t require personal guarantees, consignment financing typically doesn’t sit on a brand’s balance sheet the same way debt does. Always check with your accountant on how to record it for your specific situation.

Does consignment financing affect my personal or business credit?

It depends on the provider. Many consignment financing providers, including Kickfurther, do not report the arrangement to consumer credit bureaus. That’s a meaningful protection compared to credit cards, personal loans, or SBA-backed bank products.

What happens if my inventory doesn’t sell?

This is the most important question to ask any provider. The structure varies. With Kickfurther, repayment is generally tied to your sell-through schedule, so if sales lag, the timeline flexes—up to a point. We work with brands actively when sell-through doesn’t hit projections. Other providers may have stricter terms or require backup repayment sources, so always read the contract closely.

How fast can I get consignment financing?

Approval timelines run from a few days to a few weeks, depending on the provider, the size of the order, and how clean your financial documentation is. Once a Co-Op goes live on the Kickfurther marketplace, funding can come together in days. Plan ahead anyway. The worst time to start the process is the week your manufacturer needs payment.

Can I use consignment financing alongside other funding sources?

Yes, and most growing CPG brands do. Consignment financing covers the inventory line item; bank credit lines, equity raises, or revenue-based products can cover marketing, payroll, R&D, and other operating expenses. Stacking funding sources is normal as long as you’re clear with each provider about the others.

Do I need collateral for consignment financing?

The inventory itself often serves as the underlying asset, so traditional collateral like real estate or equipment usually isn’t required. That’s a major difference from secured bank loans, which often require a hard asset pledge in addition to a personal guarantee.

Is consignment financing available for first-time inventory orders?

Most consignment financing providers, including Kickfurther, want to see at least 12 months of sales history before funding an order. That said, “first-time” can mean different things—it might be your first wholesale PO, your first volume-buy, or your first international shipment, all of which are fundable for an established brand. If you’re truly pre-revenue, you’ll likely need to combine bootstrap, friends-and-family, or grant capital first to establish a sales record, then layer consignment financing on top once orders are repeatable.

 

New Research: The State of CPG Margins in 2026

Posted on by Amanda Levine

The margin model most CPG brands are running was built for a world that no longer exists. We did the math. Here’s what we found.

According to our recent report, in the span of twelve months, the effective U.S. tariff rate went from 2.5% to 27% and back to 12.2%. That’s not noise. For a CPG brand placing production orders months before revenue arrives, that kind of volatility becomes a real cash-flow challenge.

The brands that got hurt weren’t uninformed. They were pricing for a rate instead of a range. It’s a subtle distinction, and right now, it’s the difference between a brand that’s growing and one that’s quietly bleeding margin.

We wanted to understand exactly how widespread the damage was. So we surveyed 200+ CPG brands, pulled the latest tariff data, and built a cost-stack model covering every major expense layer a modern CPG brand faces: tariffs, fulfillment, platform fees, marketing, returns, and financing.

The result might surprise you:

A 50% gross margin in 2026 is the equivalent of a 30% gross margin in 2015.

The keystone markup—buy for $10, sell for $20—worked when tariffs averaged 2.5%, customers primarily bought in stores, and fulfillment meant handing a bag across a counter.

That world is gone.

Today, after accounting for Amazon fees, digital CAC, 3PL costs, and tariff exposure, brands running at keystone margins are losing money on every unit sold, sometimes without even realizing it.

So what does a healthy margin actually look like in 2026?

That’s exactly the question our new research report explores.

Priced for Yesterday: How Tariff Volatility Is Breaking CPG Margin Models introduces a three-tier gross margin framework with category-specific targets, built from the ground up using a full cost-stack model with a 15–20% tariff buffer baked in.

How Tariff Volatility is Breaking CPG Margin Models

No matter your industry, the report tells you:

  • What margin keeps your business alive when tariffs spike
  • What margin supports steady, sustainable growth
  • What margin lets you play offense while competitors retreat

It also walks through seven steps CPG brands can take right now—from building margin buffers into your pricing, to pursuing tariff refunds that may still be available from 2025 imports, to pre-buying strategically before the next rate shift.

This is not a “wait and see” moment

Tariff rates will continue to move. The brands that build margins for a range of scenarios and not just today’s rate are the ones that will be standing when the next shift hits.

The report is free. It takes about 20 minutes to read. And it has a framework you can apply to your own numbers today.

[Download Priced for Yesterday →]

Based on the Kickfurther Tariff Impact Survey (April 2025, n=200+ CPG brands), the Yale Budget Lab (February 2026), and CPG margin benchmarks across six product categories. All tariff figures reflect conditions as of early 2026.

Connect financial statements to inventory planning for better cash flow and growth

Posted on by Amanda Levine

Cash flow pressure in Consumer Packaged Goods (CPG) and eCommerce businesses often results from inventory decisions made at the wrong time, in the wrong quantity, or without financial context.

When inventory management operates separately from financial statements, businesses either overstock and lock up working capital or understock and lose revenue momentum. In both situations, the problem is usually the lack of connection between inventory decisions and the P&L numbers.

This guide shows you how to connect your financial statements to inventory planning, so inventory decisions strengthen cash flow rather than quietly drain it.

Why should you connect financial statements to inventory decisions?

You should connect the two because your financials tell you exactly what you can afford to buy, which products are worth restocking, and when you’re about to run out of cash.

Without that connection, you’re guessing. And guessing is expensive. Inventory distortion (stockouts plus overstock) costs global retailers $1.73 trillion in 2025, according to IHL Group. Yet 34 percent of SMBs still track inventory manually or not at all.

When you connect your financials to your inventory decisions, you buy the right products in the right quantities. You avoid tying up cash in stock that won’t move. You know when you have room to order more and when you don’t. 

Then, you can plan your financing around your actual cash position instead of reacting to a crisis. 

How to read your P&L before you place purchase orders

Your P&L should answer one question before any major order: do we have the margin and momentum to support this buy?

Here’s what to look at:

  • Gross margin: A healthy eCommerce range sits between 45 and 70 percent. According to NYU Stern data, general retail averages 33.18% and specialty retail 35.30%. If your margin is healthy and stable, you have room to invest in inventory. If it’s declining, find out why before placing another order.
  • COGS as a percentage of revenue: Should stay consistent month over month. An unexplained increase of more than 2 to 3 percent signals rising input costs, freight changes, or a product mix shift toward lower-margin items.
  • Operating cash flow: Positive net income doesn’t mean cash is available. If your P&L shows a profit but your cash flow statement shows negative operating cash flow, money is locked in inventory or receivables. Adding more stock in that position compounds the problem.

One practical framework that ties your P&L data directly to purchasing is Open-to-Buy (OTB) planning. 

It tells you exactly how much new inventory you can afford to buy in a given period without overextending your cash.

The formula is:

OTB = Planned Sales + Planned Markdowns + Planned End-of-Month Inventory – Beginning-of-Month Inventory

Say you’re planning $50,000 in sales next month, expect $2,000 in markdowns, want $10,000 of inventory left at month’s end, and you’re starting with $20,000 already in stock. 

Your OTB is $42,000. It means that’s the maximum you should spend on new inventory this month.

If your planned sales drop to $30,000, your OTB shrinks to $22,000. 

That’s the point. It turns your financial data into a hard purchasing limit instead of a loose guideline.

Stop and wait before placing a large PO (purchase order) if you see gross margin declining, COGS growing faster than revenue, or inventory levels rising faster than sales velocity. 

For eCommerce sellers building this habit from scratch, EcomBalance offers monthly bookkeeping that ensures your P&L is clean, current, and ready to guide every purchasing decision.

Ways to turn gross margin insights into smarter inventory allocation

Gross margin tells you how profitable a product is. But to make smarter inventory decisions, you need to know which products are worth putting your money behind and how much.

Two frameworks help with this:

Use GMROI to compare products fairly

Gross Margin Return on Investment (GMROI) tells you how much gross profit you earn for every dollar invested in inventory.

GMROI = Gross Profit ÷ Average Inventory Cost

A GMROI above 1.0 means you’re making money on that stock. Target above 3.0. Use it to compare products directly and allocate more budget to what’s working hardest.

Rank your products with ABC analysis

Once you know your GMROI by product, ABC analysis helps you act on it:

  • A products (20% of SKUs, 80% of gross profit): Stock aggressively. These are your priorities.
  • B products (30% of SKUs, 15% of gross profit): Maintain, but don’t over-invest.
  • C products (50% of SKUs, 5% of gross profit): Cut back or clear out. They’re tying up cash without contributing much.

Also, watch for any product that hasn’t sold in 90 days. The longer slow-moving stock sits, the more it costs you in storage, insurance, and tied-up cash. Clear it out before it becomes a liability.  

How to fund purchase orders without straining cash flow

Even with clean financials and solid purchasing decisions, there’s still a timing problem. You may pay for inventory months before revenue comes back.

The typical CPG cycle: 

  • Pay manufacturer’s deposit.
  • Wait 60 to 120 days for production and shipping.
  • Hold inventory for 30 to 60 days.
  • Then sell to a retailer on Net 60 terms.

That’s a cash conversion cycle of 150 days or more, with your cash locked up the entire time. 82 percent of small business failures involve cash flow problems.

Here are some common funding options to bridge that gap:

funding comparison chart

One option worth knowing specifically for CPG brands is Kickfurther’s Co-Op model. Rather than taking on debt or diluting ownership, Kickfurther connects brands to a community of marketplace buyers who offer inventory financing on a consignment basis. 

Brands access $20,000 to $1,000,000 per order, and payment only starts as inventory sells. Because it’s structured as consignment, there’s no debt added to your balance sheet and no equity given up.

If cash flow is holding back your next order, see how Kickfurther works for CPG brands and check if your brand qualifies.

Common mistakes to avoid when you connect financials and inventory

Connecting your P&L to your purchasing decisions reduces risk, but only if you avoid the following patterns that can undermine the whole system:

  • Ordering based on instinct instead of data: Gut feel is how dead stock gets created. Funko Pop over-ordered collectibles in 2022 and destroyed over $30 million in product in 2023.
  • Booking inventory directly to COGS at purchase: Under accrual accounting, inventory is a balance sheet asset until it sells. Expensing it at purchase makes your P&L unreliable as a planning tool.
  • Ignoring COGS at the SKU level: Blended margins hide a lot. A brand can show a 45 percent overall margin while individual SKUs run at 18 percent. Know your numbers per product.
  • Skipping inventory reconciliation: When physical counts don’t match your records, COGS is wrong, margins are wrong, and your P&L can’t guide purchasing decisions.
  • Mixing up profit and cash flow: A profitable P&L doesn’t mean cash is available. Amazon holds payouts for days or weeks after a sale is recorded. Always check your cash flow statement before placing an order.

Tools and systems that connect accounting, inventory, and cash flow forecasting

Once your purchasing decisions are grounded in your financials, you need systems that keep that data accurate and connected at all times.

Here are the key tools that help:

  • QuickBooks Online and Xero: The standard accounting platforms for eCommerce. Both produce the P&L, balance sheet, and cash flow reports you need and integrate with most inventory tools.
  • A2X: Syncs sales, fees, and COGS from Amazon, Shopify, and other marketplaces directly into QBO or Xero automatically.
  • Cin7 Core: Built for multi-channel brands with 50 or more SKUs. Two-way sync with QuickBooks and Xero keeps inventory and accounting data aligned.
  • Inventory Planner: AI-driven purchasing recommendations at the SKU level for inventory demand forecasting and OTB planning.

All of these tools are only as good as the books behind them. A dedicated eCommerce bookkeeping service ensures your financial data is accurate, closed on time, and ready to act on.

Final thought

Getting your financials and inventory in sync is one thing. Having the cash to act on what your numbers are telling you is another.

That’s where Kickfurther comes in. We help CPG and eCommerce brands fund inventory without taking on debt or giving up equity. You get up to $1,000,000 per order and pay nothing until your inventory sells. Many Co-Ops fund within 24 hours.

Stop letting cash flow hold back your next order. Schedule a call with our team and let’s talk.

Frequently asked questions (FAQs)

Below are a few common questions about connecting financials to inventory planning:

What financial metrics should guide purchase orders?

The core metrics: inventory turnover ratio (target four to six times per year), Days Inventory Outstanding (DIO), Cash Conversion Cycle (CCC), gross margin by SKU, GMROI, and current ratio (1.2 to 2.0 before committing to a large order).

Simplify your purchase order process by keeping these numbers clean, current, and easy to act on.

How often should I review financials before I place orders?

At a minimum, go through your full P&L, balance sheet, and cash flow statement every month. Try to close your books by the 15th so you have clean data before you make any buying decisions that month. 

Before any major PO, check current cash, outstanding payables, and expected inflows over the next 60 to 90 days. Two to three months before peak season, run a full demand forecast.

Can better inventory decisions improve cash flow?

Yes, and faster than most founders expect. When you stop over-ordering slow sellers, that cash is freed up immediately. Preventing stockouts on your best products means you stop losing sales to competitors. 

Also, when you improve your inventory turnover from three to six times per year, you cut the time your money is sitting on a shelf in half.

About the Author: This blog post was contributed by our partner EcomBalance, the go-to bookkeeper for eCommerce businesses.