Content Types: Funding Solutions

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.

 

Common Inventory Mistakes CPG Brands Make (And How To Avoid Them)

Posted on by Amanda Levine

Most brands that hit $300K-$1M in revenue run into the same inventory challenges. These aren’t failures; they’re predictable growing pains. Here’s what to watch for.

Mistake #1: Ordering just-in-time when you should be thinking ahead

What it looks like: Waiting until you’re almost out of stock to place the next PO. Ordering exactly what you need for the next 60 days, nothing more. Operating on a ‘we’ll figure it out when we get there’ basis.

Why it hurts: When you’re reordering reactively, you lose negotiating power with suppliers. No volume discounts. No flexible terms. You’re paying more per unit right when growth should be lowering your costs. Plus, if lead times stretch (and they always do), you risk stockouts during your best sales periods.

How to avoid it: Build a rolling 6-month inventory forecast. It doesn’t have to be perfect—just directionally right. Order ahead when you can, especially before peak seasons. Think about inventory as a strategic asset, not just an operational task.

Mistake #2: Tying up all your cash in one big PO

What it looks like: Spending 70-80% of your available cash on a single inventory order. Having no cushion for marketing, hiring, or unexpected opportunities. Feeling cash-strapped right after placing an order.

Why it hurts: The most expensive inventory decisions aren’t about overordering; they’re about sacrificing growth because all your cash is locked up waiting for products to sell. When opportunities come (a retailer wants a test order, a wholesale lead converts, Amazon recommends you for a promotion), you can’t take advantage because your money is tied up in inventory that won’t sell for 60-90 days.

How to avoid it: Leave at least 30-40% of your working capital available after placing a PO. If you can’t afford to do that and still order the inventory you need, it’s a signal that you should explore external funding options rather than stretching your cash dangerously thin.

Mistake #3: Accepting bad supplier terms because you need product now

What it looks like: Paying 100% upfront because you don’t have negotiating leverage. Accepting longer lead times than you’d prefer. Skipping quality checks or rushing production to save time. Ordering smaller quantities at higher per-unit costs.

Why it hurts: When you’re desperate, suppliers know it. You end up with worse pricing, worse terms, and more risk. And if quality suffers because you rushed, you’ll pay for it in returns, reputation damage, and lost customer trust.

How to avoid it: Build relationships with your suppliers before you’re in crisis mode. Negotiate terms when you’re in a strong position (like right after a successful order), not when you’re scrambling. If you’re consistently in ‘urgent’ mode, that’s a signal your planning or capital structure needs to change.

Mistake #4: Treating all SKUs the same

What it looks like: Reordering everything equally, regardless of sales velocity. Not tracking which products are actually driving profit. Keeping slow-moving inventory in stock ‘just in case.’

Why it hurts: Not all SKUs are created equal. Some move fast, some sit. When you treat them the same, you end up with too much of the slow stuff and not enough of the winners. This ties up cash in dead inventory while your best-sellers stock out.

How to avoid it: Run an ABC analysis:

  • A items (top 20% of SKUs that drive 80% of revenue): Always keep these in stock
  • B items (steady but not stellar): Order predictably but don’t overstock
  • C items (slow movers): Order minimally or consider discontinuing

Mistake #5: Saying no to growth because timing doesn’t line up

What it looks like: Turning down wholesale opportunities because you can’t afford the PO. Passing on promotional placements because inventory won’t arrive in time. Saying ‘maybe next quarter’ to strategic partnerships.

Why it hurts: The opportunities that come at inconvenient times are often the best ones. Retailers don’t wait. Promotional slots don’t stay open. If you’re consistently saying no because of inventory timing or cash constraints, you’re not operating at your full potential.

How to avoid it: Build optionality into your capital structure before you need it. Know what funding sources you’d tap if the right opportunity came up. Don’t wait until you’re desperate. Set up relationships and understand your options in advance.

Mistake #6: Assuming you can bootstrap forever

What it looks like: Pride in ‘never taking on debt.’ Viewing external capital as a weakness, not a tool. Growing slower than you could because you’re waiting for revenue to fund the next order.

Why it hurts: There’s nothing wrong with bootstrapping in the early days. But at a certain point, self-funding becomes self-limiting. Your competitors who have access to capital can move faster, take bigger swings, and capture market share while you’re waiting for cash to free up.

How to avoid it: Recognize that smart founders use capital strategically. Inventory funding, in particular, isn’t debt. It’s aligning your payments to sales performance. The goal isn’t to avoid all external capital; it’s to use the right capital at the right time to accelerate growth without giving up equity or overextending.

See the pattern here?

Here’s what ties all of these mistakes together: They’re reactive decisions made under pressure. The brands that scale cleanly are the ones that think about inventory before it becomes a bottleneck. They plan ahead, build relationships, and understand their capital options before they’re desperate. You don’t need to solve all of this overnight. But recognizing these patterns early means you can make strategic choices instead of scrambling.

Here’s what to do next

If you’re seeing yourself in 2-3 of these scenarios, it’s worth thinking about how your capital structure could give you more flexibility.

If you’re a US brand with trailing 12-month revenue under $200K, you may not be ready for Kickfurther funding YET, but we work with tons of wonderful partners from funding options to fulfillment and everything in between. See if one could be a fit for you! And when the time is right, we’d love to help you add consignment inventory funding to your capital stack.

Kickfurther Expands Access to Inventory Funding for Brands Under $400K in Revenue

Posted on by Amanda Levine

Growing a product business has never been about demand alone. It’s also about timing. Founders feel that gap every time a supplier needs payment upfront, while revenue is still weeks or months away. We built Kickfurther to bridge that gap with consignment-based inventory funding that aligns payment to actual sales, not fixed schedules.

Today, we’re making access to that model available to even more emerging brands.

What’s New

Kickfurther is expanding its qualification criteria to support brands with $200,000–$400,000 in trailing twelve-month revenue, as long as they hold purchase orders from national retailers such as Target, Walmart, Costco, Amazon, and others.

This means more early-stage founders can say yes to every opportunity–not just the ones they can afford–with access to inventory funding that doesn’t restrict cash flow.

Why We’re Making This Change

Founders at this stage have proven something important: customers want their product, and now major retailers do too.

What they often don’t have is the working capital to fulfill those large POs without draining cash or taking on personal risk. Traditional financing wasn’t built for this moment:

  • approval is slow
  • payments start immediately
  • and capital is credit-based rather than sales-based

Kickfurther’s model flips that dynamic:

  • We pay your supplier upfront (or fund recent orders) so you can stock up with confidence
  • You pay us back only as the inventory sells, without adding debt to your balance sheet
  • Your working capital stays free for marketing, hiring, or simply stabilizing operations as you grow

Emerging brands with real traction deserve a capital structure that moves at their speed. This update gives them exactly that.

Who Now Qualifies Under the Expanded Criteria

A brand is now eligible if it:

  • Is a US-based company
  • Sells physical products
  • Has at least $200,000 in trailing twelve-month revenue
  • Holds active purchase orders with national retailers (Walmart, Amazon, Target, Costco, etc.)

This update ensures that brands with meaningful retail opportunities are no longer held back by revenue limits.

What This Means for Founders

If you’re building an emerging CPG brand, this expansion means:

You can finally say yes to major purchase orders

Retailers move fast. Cash flow shouldn’t slow you down. Capture every order and unlock volume discounts you may not have been able to reach before.

You don’t have to choose between growth and liquidity

Inventory shouldn’t force you to pull back on marketing, team support, or product development.

You can grow without debt or dilution

Consignment funding keeps your balance sheet clean and your ownership intact.

You get more than capital. You get a partner.

Founders describe Kickfurther as feeling like a “coworking experience,” not a transactional lender. We’re here to help CPG founders grow and succeed—and we’re in it for the long haul.

Why This Matters for the CPG Community

The early-growth stage is where many great brands stall. And it’s not because demand isn’t there; it’s because capital options don’t align with how product businesses actually operate. Long lead times, upfront supplier payments, seasonal shifts, and retailer terms all create friction that traditional financing wasn’t designed for.

Kickfurther’s expansion brings more founders into a model aligned with how their businesses truly work.

Looking Ahead

This is one step in a broader effort to support the full spectrum of CPG builders, from emerging brands proving demand to established operators scaling multi-SKU portfolios. As brands grow, our funding limits and pricing improve with them, creating a long-term partnership that compounds over time.

If your brand now falls within the updated criteria and you’re preparing for your next production run or fulfilling a new retail partnership, we’d love to support you.

Connect with our team to see if Kickfurther’s consignment-based inventory funding is the right fit for your next stage of growth.

Flexible Funding That Rewards Growth: Meet Kickfurther’s New Pricing Model

Posted on by Amanda Levine

Kickfurther’s new pricing is designed to give CPG brands more flexibility, more breathing room, and better cash flow.

We’ve moved away from the old subscription model — where brands paid an upfront annual fee to access the platform — and replaced it with a more flexible model that better aligns with your growth cycle.
How It Works

With our new pricing model, you can now access pay-as-you-use funding, meaning you only pay a small percentage when you use it.

And just like before, you’ll still enjoy benefits like:

  • Payment after sales – You won’t start paying until the inventory is sold
  • Loyalty rewards – Your funding fee goes down the more you work with us

Why It’s Better

For CPG brands, timing is everything. Our new model gives you the runway to scale without straining cash flow.

You’ll still enjoy everything that makes Kickfurther unique — debt-free funding, off-balance sheet treatment, payment after sales, and loyalty rewards — but now with no upfront subscription cost. Plus, if you sell your inventory faster, your Monthly Consignment (Co-Op) fee can go down.

Kickfurther payment structure

Why We Made the Change

This update came directly from customer feedback.

Brands told us they loved Kickfurther’s flexibility but wanted pricing that scaled with their usage. So, that’s exactly what we built.

Now, your costs are more predictable, your payments are better aligned with sales, and your capital stays focused on what drives growth: marketing, product innovation, and distribution.

Because when your cash flow is stronger, your whole business moves faster. And that’s what we’re here to support.

If you have questions or would like to learn more about how to take advantage of this new pricing model where everyone wins, book time to chat with a member of our team.

Inventory Financing vs. Revenue-Based Financing: A Guide

Posted on by Amanda Levine

In 2025, small and mid-sized businesses, particularly those in the consumer packaged goods (CPG) industry, are seeking more flexible funding options to manage inventory and cash flow. Traditional loans often come with stringent repayment terms, personal guarantees, and limitations on how funds can be used. Two emerging funding options gaining traction are Revenue-Based Financing (RBF) and Inventory Financing with Kickfurther. Let’s take a closer look at how these options compare and which might be the best fit for your business.

Revenue-Based Financing

Revenue-Based Financing provides businesses with capital in exchange for a percentage of future revenues until the agreed-upon repayment amount is met. This model is particularly appealing for CPG brands that experience seasonal fluctuations, as it allows for flexible repayment schedules that align with sales performance.

Advantages of Revenue-Based Financing

  • Flexible Payback Structure: RBF repayments are directly tied to sales performance. If a company experiences a strong revenue month, it pays back more; during slower months, it pays back less. This flexibility makes RBF a useful option for businesses with cyclical or seasonal sales patterns.
  • Upfront Capital: Businesses receive significant upfront funds that can be allocated toward large inventory purchases, marketing campaigns, or other necessary expenses, leveraging future revenue for immediate growth.
  • Non-Dilutive: Unlike venture capital or equity financing, RBF does not require business owners to give up ownership stakes in their companies.

Disadvantages of Revenue-Based Financing

  • Limited Funding: The amount of capital available is directly tied to revenue. Businesses with lower sales volumes may struggle to secure the necessary funds to support large-scale inventory needs.
  • Best for Short-Term Investments: RBF is ideal for expenses that quickly generate returns, such as inventory and marketing. It is not a suitable solution for ongoing operational expenses like staffing.
  • Costly Repayments: Since payments are taken directly from sales revenue, businesses must be prepared for consistent withdrawals. This can create a cash-flow strain, especially if revenue projections are not met.

Inventory Financing

 

Inventory financing allows businesses to leverage the resources of a financing partner to pay for inventory production. This type of financing is especially helpful for businesses that experience significant delays between paying for inventory and receiving payment from future sales.

With inventory financing, the products produced act as the collateral for the financing, which means that if the business reports an inability to repay the funding, the inventory can be sold to cover the debt. This can provide a level of security for the financing partner, which can result in more favorable terms for the business.

One of the key benefits of inventory financing is that it can be customized to address a business’s exact manufacturing, shipping, and sales timelines. Some providers even offer payment terms that align with natural cash flow cycles, meaning that no payment is required until the inventory sells. This can help to improve a business’s cash flow and reduce the risk of running out of working capital.

Inventory financing can also be helpful for businesses that want to receive volume-based discounts by placing larger orders to support all of their sales channels. This works best when done on a regular basis, such as quarterly, and can help to prevent stock-out issues that can stifle growth.

Inventory Financing with Kickfurther

For businesses in the CPG space looking for a more tailored inventory funding solution, Kickfurther presents a unique alternative. Unlike traditional financing or revenue-based, Kickfurther enables companies to secure up to 100% of their inventory costs with payment terms that align with actual sales performance.

Why Choose Kickfurther?

  • No Immediate Repayments: Businesses do not start paying back until their inventory sells, allowing them to manage cash flow more effectively.
  • Non-Dilutive Capital: Kickfurther does not require business owners to give up equity, preserving ownership and control.
  • Not Considered Debt: Since Kickfurther funding is not classified as a loan, it does not appear as debt on financial statements. This can be advantageous when seeking additional funding or negotiating valuation with investors.
  • Fast and Large-Scale Funding: Kickfurther can fund entire inventory orders quickly, helping businesses meet supplier deadlines and keep up with demand.

How Kickfurther Works

Kickfurther connects businesses with a community of buyers who fund their inventory needs. Once funded, businesses receive their inventory without taking on debt. As sales occur, businesses repay buyers, typically with an agreed-upon profit margin. This structure ensures that payments are only made as inventory is sold, reducing financial strain on the business.

Which is Best for Your Business?

Feature Revenue-Based Financing Kickfurther Inventory Financing
Repayment Structure Fixed percentage of monthly revenue Payment made only as inventory sells
Use of Funds Inventory, marketing, and growth-related expenses Strictly for inventory purchases
Dilution Non-dilutive Non-dilutive
Debt Classification Considered a liability on financial statements Not classified as debt
Speed of Funding Relatively quick Very fast, aligns with supplier needs
Risk Level Moderate, requires strong sales to avoid cash flow issues Lower risk, since repayments align with sales

Final Thoughts: Which Option is Right for You?

For CPG brands and product-based businesses, maintaining sufficient inventory levels is critical for growth. Kickfurther’s ability to provide up to 100% of inventory funding without immediate repayments can be a game-changer for a growing brand. However, brands that need capital for multiple operational needs beyond inventory may find Revenue-Based Financing to be a more versatile solution.

As brands navigate 2025, the demand for flexible, growth-oriented financing solutions will continue to rise. Whether you choose Revenue-Based Financing or Kickfurther, the key is selecting the funding option that best aligns with your sales cycle, growth strategy, and cash flow management needs.