Content Types: Inventory Financing

Inventory Financing vs. Revenue-Based Financing: A Guide

Posted on by Kaylyn Perry

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.

Inventory Financing vs. Traditional Financing: Which is Right for Your Business?

Posted on by Kaylyn Perry

Securing the necessary funds to manage inventory and scale can be challenging, especially for growing CPG brands. Traditionally, businesses have relied on bank loans and other conventional financing methods. However, alternative funding solutions like Kickfurther have emerged, offering innovative approaches to inventory funding. This article explores traditional funding sources and compares them with Kickfurther’s model to help you determine the best fit for your CPG brand.

Traditional Funding Sources

Traditional financing options, such as bank loans, lines of credit, and trade credit, have long been relied upon by CPG brands to manage inventory and cash flow. Each of these methods offers advantages, from predictable repayment structures to flexible access to capital. However, they also come with challenges, including stringent approval requirements, rigid repayment terms, and potential impacts on supplier relationships. Understanding the benefits and drawbacks of these traditional funding sources can help your brand determine the best approach to financing its inventory needs.

Bank Loans

Bank loans have long been a go-to option for CPG brands seeking capital for inventory and operational needs. These loans involve borrowing a lump sum from a financial institution, which is repaid over time with interest.

Advantages:

  • Secure Capital: Bank loans provide a reliable source of funds, often with fixed interest rates, allowing for predictable repayment schedules.
  • Flexibility in Use: Once approved, the funds can be utilized as needed, whether for inventory purchases, equipment, or other operational expenses.
  • SBA Loans: The Small Business Administration (SBA) offers loans specifically designed for small businesses, including those in the e-commerce sector, often with favorable terms.

Disadvantages:

  • Lengthy Approval Process: Obtaining a bank loan can be time-consuming, involving extensive paperwork and a thorough review of financial history.
  • Stringent Requirements: Banks often require collateral and may favor established businesses with proven track records, making it challenging for startups or rapidly growing brands to qualify.
  • Rigid Repayment Terms: Fixed repayment schedules may not align with the cash flow fluctuations typical in the CPG industry, potentially leading to financial strain.

Line of Credit

A line of credit provides businesses with access to a predetermined amount of funds that can be drawn upon as needed, offering flexibility in managing cash flow.

Advantages:

  • On-Demand Access: Funds can be accessed when required, making it easier to manage short-term financial needs.
  • Interest on Used Funds: Interest is only paid on the amount drawn, not the entire credit limit.

Disadvantages:

  • Variable Interest Rates: Rates may fluctuate, leading to potential increases in borrowing costs.
  • Renewal Requirements: Lines of credit may need periodic renewal, involving reassessment of the business’s financial status

Inventory Financing

Inventory financing allows CPG brands 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 brands 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

Kickfurther offers an alternative approach tailored to the unique needs of CPG brands. By connecting businesses with a community of buyers who fund inventory, Kickfurther provides a platform where companies can secure up to 100% of their inventory costs with payment terms aligned to actual sales performance

Why Choose Kickfurther?

  • No Immediate Repayments: Repayments commence only after the inventory is sold, aligning cash outflows with revenue generation.
  • Non-Dilutive Capital: Businesses retain full ownership and control, as Kickfurther does not require equity stakes.
  • Off-Balance-Sheet Financing: Funding obtained through Kickfurther is not classified as debt, preserving the company’s balance sheet for future financing opportunities.
  • Rapid and Scalable Funding: The platform enables quick access to funds, allowing businesses to meet supplier deadlines and scale operations in response to market demand.

How Kickfurther Works:

  1. Funding Campaign: Businesses create a campaign on the Kickfurther platform, detailing their inventory needs and offering a profit margin to attract buyers.
  2. Community Investment: A community of buyers funds the inventory purchase, effectively becoming stakeholders in the product’s success.
  3. Inventory Acquisition: Once funded, the business receives the inventory to sell through its established channels.
  4. Repayment: As inventory sells, the business repays the buyers, including the agreed-upon profit margin, until the obligation is fulfilled.

This model ensures that repayments are directly tied to sales performance, reducing financial pressure and aligning incentives between the business and its backers.

Which Option is Better for Your CPG Brand?

Deciding between traditional financing and Kickfurther depends on various factors specific to your business:

  • Business Stage and Financial History: Established brands with solid financials might find bank loans accessible and beneficial. In contrast, newer brands or those with fluctuating sales may benefit from Kickfurther’s performance-based repayment structure.
  • Cash Flow Considerations: If maintaining steady cash flow is a concern, Kickfurther’s model offers flexibility by aligning repayments with sales, whereas traditional loans require fixed payments regardless of revenue.
  • Ownership and Control: Brands unwilling to dilute ownership or provide collateral may prefer Kickfurther, which offers non-dilutive capital without collateral requirements.
  • Urgency and Funding Speed: Kickfurther’s platform can provide quicker access to funds compared to the often lengthy approval processes of traditional bank loans.

Assessing your brand’s specific needs, financial health, and growth objectives will guide you in choosing the most suitable funding option. Embracing a solution that aligns with your cash flow and growth needs is essential for sustaining growth and achieving long-term success in the competitive CPG landscape