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Regardless of how established your business is, you may need inventory financing. The good news is, there are plenty of options for inventory financing. The bad news is that some options may be harder to qualify for than others. If you own a small business or startup you may have learned the bad news the hard way, but don’t give up. Keep reading to learn the basics of inventory financing.

How inventory financing works

There are various types of inventory financing. The specifics on how inventory financing works can vary depending on the type of inventory financing you use. In a nutshell, inventory financing provides the funds a business needs to purchase inventory. In some cases the inventory purchased may be used as collateral for the loan. This means if you default on the inventory loan, the lender can repossess the inventory and liquidate it for cash. In other cases, inventory loans may not require collateral. For example, if you use a personal loan for inventory financing there will probably be no collateral required. If you need to purchase perishable inventory, unsecured inventory financing may be a better option. A little later on we will explore the various types of inventory financing and how they work.

How do you finance inventory?

It’s common for businesses, both small and large, to need financing to purchase and floor inventory. The first step toward securing inventory financing is to determine what type of inventory financing is best for your business. Most lenders have basic requirements that businesses will need to meet in order to qualify for inventory or business financing. It’s important that your business can qualify for the type of inventory financing you want to secure. Most lenders evaluate how long you have been in business, how much capital you have, how healthy cash flow is, and so on. In addition, they usually pull credit and may require a personal guarantee. For small businesses and startups that may need financing for inventory before they can truly establish sales, thus making inventory financing challenging to secure. Some small businesses and startups may need to look into alternative inventory financing options such as Kickfurther. Even if your business does qualify for traditional inventory financing, an alternative option such as Kickfurther may be cheaper and better.

What are the methods of financing your inventory?

Different methods of inventory financing are available. While some options may be better than others, some businesses may be limited on options. For example, if you are just getting started you may have to use credit cards to purchase inventory in order to establish sales. While credit cards may have high interest rates that take away from profit margins, you’ll most likely need proven sales to qualify for a lower interest rate method. Let’s take a look at various methods for inventory financing. . .

Credit cards

Credit cards can be used for inventory financing. While other options may offer lower interest rates, small businesses and startups may need to use credit cards to get momentum. However, credit cards should not be thought of as a long term inventory financing solution. Lower interest rate and more legitimate types of inventory financing usually require proven sales and 1-2 years in business. Once you meet the minimum criteria for inventory financing, you should try to apply. In the meantime, credit cards can help you establish sales until you can qualify for other types of inventory financing.

Personal loans

For businesses that are just starting out, personal loans can be used for inventory financing. In fact, personal loans are usually a better option than credit cards. Most personal loans have lower interest rates compared to credit cards. In addition, most personal loans have higher loan amounts. Securing a personal loan is usually relatively simple and you shouldn’t need perfect credit to qualify. However, if you default on a personal loan it will impact your credit. 


Crowdfunding is gaining popularity among startups that need inventory financing. If entrepreneurs can create a loyal following and gain a vote of confidence from several investors, they may be able to successfully use crowdfunding. One thing to remember is that most crowdfunding platforms charge fees for raising funds, so be aware that the total amount you raise may be subject to a fee. Since investors make money on interest and do not have collateral, it’s usually a high risk investment. Kickfurther takes a unique approach to crowdfunding that allows individuals and organizations to create campaigns and investors to purchase inventory on consignment. 


Most banks offer terms loans that businesses can use for inventory financing. While bank loans may have attractive interest rates and terms, they are usually hard to qualify for. Just the application process alone can take 1-3 months. In addition, most banks will require a personal guarantee and excellent credit. If you don’t qualify for a bank loan yet, it doesn’t hurt to meet with a banker and find out what you need to do to be able to qualify one day. Alternatively, if you do qualify for a bank loan now, you should be able to secure a competitive fixed interest rate with predictable monthly payments. As an added bonus, you will have access to a professional banker that is familiar with your business and can provide advice.

What type of inventory can be financed through Kickfurther?

Kickfurther allows consumer product good (CPG) brands to fund new inventory of physical products or shelf-stable (12 months or more) consumables. On Kickfurther, brands fund inventory on consignment, meaning that the inventory is purchased on the brand’s behalf and then consigned back to them, where the brand will sell through the inventory per usual and then pay back a small amount on each item as it sells; this is where the cost of funding is seen. On Kickfurther, brands can also leverage recently produced inventory for working capital and pay back on the same model.

What is the best way to finance your inventory?

For startups and small or large businesses, Kickfurther is one of the best ways to finance inventor due to our low costs, superior flexibility in payment timelines, and higher funding limits than often available elsewhere. 

How Kickfurther can help your business

Kickfurther can help your business get the money it needs to purchase inventory and grow sales. Businesses can up to $2 million (or more) for inventory on Kickfurther. In addition, Kickfurther allows businesses to repay funding only once inventory begins selling, which means no cashflow bottleneck caused by immediate repayments or daily debits that begin immediately with other funding options. This can take a lot of stress off business owners knowing that they will not have an immediately due monthly payment that they might not be able to cover. 

Wrapping Up

For businesses growing quickly or experiencing cash-constrained growth, create an account on Kickfurther to immediately receive a funding estimate. Kickfurther was created by an entrepreneur who experienced an inability to secure funding for a business in high-growth mode with eager customers, which stunted growth. We want to prevent that from happening to other businesses. See how much more inventory and revenue your business could secure by using Kickfurther by creating an account today and seeing an estimate in just minutes.

Ready to grow your business? Apply for inventory financing today!

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