Small Business Inventory Financing

Do you sell a physical product with sales over $150,000?

Growing companies often report that funding inventory as one of their biggest struggles. Not just because paying for a manufacturing run is one of the biggest expenses a growing CPG brand will incur, but also because of the higher costs associated with the smaller manufacturing runs young brands often order. Larger brands can unlock lower prices with volume-based discounts from their manufacturer while newer brands do not have the capital available to fund those large orders.

Learn More


Deals Funded


In Funding


Funding Success

How much funding could your company raise?

Submit this form to see your estimate.

Business Form
US Entity/Owner?

Why choose Kickfurther for

Small Business Inventory Financing?

Don’t pay until
you sell.

Your payment obligation only begins once your sales are made. This alleviates the cash-flow pinch that lenders cause without customized repayment schedules. Free up capital to invest in scaling your business without impeding your ability to maintain inventory

30% cheaper

Know your rates. When you compare ours, you’ll often see that you’re saving. We cost less than factoring, PO financing, and many lenders. We also have higher limits than competitors.

Fund up to $1 million
in an hour.

Once approved and the deal goes live, most deals fund within a day (often within minutes to hours), so you’ll never miss another growth opportunity.

It’s easy, it works, &
it grows with you.

Companies access higher funding limits and often get lower rates as they return to Kickfurther, creating a scalable solution that grows alongside your company.

“Tough Times Call For Creative Funding — Check Out
Kickfurther’s Clever Model”

Join 800+ Kickfurther success stories

Inventory Financing Options for Small Business


There are a number of strong arguments for ordering inventory in larger batches, but often that’s not financially feasible. For one, if you tie up all your cash in an inventory run, how can you cover payroll, rent, marketing and other operational expenses before you have your inventory in hand and revenue coming in? What’s the best way for small businesses to both order the inventory they need to meet demand and to maintain cash flow health during the period between ordering inventory and having it available to sell?  For many growing businesses, especially those whose sales are outpacing their levels of inventory or who are adding new distribution channels and need to increase inventory levels and the operational expenses to support them, small business inventory funding can often be the answer.

What is small business inventory financing?

The simplest way to summarize the solution inventory financing provides is that funding inventory often costs a lot of money and you need money to do it. Inventory financing provides it. The funding provider supplies the capital to fund the inventory and you repay them  later during or after selling the goods. Like any financial solution, there are a few ways companies structure this funding, but the important feature and their main commonality is this: the inventory you buy is the collateral for the loan.

What are inventory loans for small businesses?

Inventory loans provide the money you need to fill your shelves by giving you a business line of credit or, a short-term loan, or payment in full to your manufacturer on your behalf for inventory. If you receive money directly, funding is limited to the use of purchasing inventory , and the funded amount is calculated based on what you pay your suppliers to produce the inventory. Should something unforeseen occur and you’re unable to repay the funding, the finance company has the right to seize the inventory as repayment of the loan balance.

How does small business inventory financing work?

Because the inventory is the collateral, many traditional inventory loan providers do not give you 100% of its value; instead they factor in the likely value they would receive for the inventory should they need to repossess it as payment.  Because Their liquidation valuation will be less than the market value, lenders will offer you between 50% and 80% of the total inventory cost.

What you are buying will affect the actual figure. If your inventory has a limited shelf life or is likely to have a low resale value, you will be offered less than if it is a premium product. In fact, if your inventory does have little likelihood of retaining value, you may find inventory financing difficult to come by and will likely need to use an alternative funding source.

You’re likely to find that inventory funding providers can vary widely. Some only fund loans starting at $500,000, which is rather more than most small businesses immediately need. Other lenders offer funding beginning at lower levels to accomodate all business needs and types. To qualify, funding partners will likely review your financial records and supply chain, possibly including your storage facilities.. If that sounds strange, it’s really not for this type of funding, though you should consider these all things that may occur and not actions guaranteed to be a part of your experience.

If you are in the earliest stages of a startup, some types of inventory funding may not work for you as funding institutions will typically require a track record of some type for this form of funding. However, there are a number of resources to help get businesses off the group, including  crowdfunding for new products, peer-to-peer lending, angel investors, or government loans. Remember, what that required “track record” means differs between institutions, so don’t assume you’ll be unable to work with other partners if you don’t qualify for another. Typically a year in business begins to open many doors, but many also work off revenue, so even if you’re young but growing revenue quickly, they may be able to help.

Why do small businesses apply for inventory financing?

Inventory financing, as the name implies, can be used by businesses that deal with tangible products. These include product-based businesses that experience high inventory turnover rates. In general, inventory financing loans are sought after by small businesses that have exhausted other options to acquire additional funding. And, since inventory financing is easier to qualify for, many businesses that experience great inventory turnover rates such as retailers, restaurants, distributors, and wholesalers opt to take out an inventory financing loan to meet their financing needs.

Is inventory financing right for your business?

As a small business owner, having an understanding of the different financing options you can avail of is useful in case your business becomes strapped for cash. The reality is that almost all businesses experience some sort of cash flow issue at some point in their entrepreneurial journey. Whether you’re trying to acquire additional funding to restock inventory or get ahead of a busy sales season, it’s important to understand that inventory financing can provide you with the capital that you need especially if you find it difficult to secure other more traditional types of loans. Fortunately, an inventory financing loan will help you cover your inventory procurement needs without the strict requirements that other financial products may have.

What are my options for inventory financing for small businesses?

There are two main types of inventory financing: a loan where you receive a lump sum, or a business line of credit.

  • A business line of credit works much like a credit card. The lender agrees a maximum sum it is prepared to lend, and you can borrow against that amount when buying inventory. Important things to remember about this are:
    • As you make the regular repayments, the money will be re-available to you to purchase more inventory.
    • You only pay interest on the outstanding amount. For instance, if your credit limit is $100,000, but you only buy $60,000 of inventory, you only pay interest on that $60,000, not the full $100,000.
    • You cannot use this money for any other purpose than inventory.
  • The other type of inventory financing offered by some lenders is the short-term loan. Very much like a traditional bank loan, the lender pays you a lump sum to purchase your inventory, which you pay back, plus interest, with regular repayments. Terms are usually short, with a maximum often of 12 months.

The business line of credit in this instance is often more sought-after, but can be harder to secure for younger businesses. A short-term loan is often a route for most businesses, and many inventory financing companies will be happy to work with you again once you’ve paid off your first loan.

What are the pros for using inventory financing for your small business?

There are three main benefits for the retail business owner involved with inventory loans:

  • Inventory financing allows you to react to changes in the marketplace quickly and easily. It means being able to pounce on business opportunities to capitalize on demand that outpaces your supply and allows your business to be fluid in its inventory acquisition. The ability to follow and anticipate trends, and take advantage of bulk buying discounts, can boost profitability by eliminating costly stockouts and by improving your margins through those discounts.
  • Your cash flow remains unaffected by your inventory purchasing. This means you can concentrate on running the business free from worry about seasonality or how to afford the other investments your company needs to make to scale operations. The result is that your business will be better positioned to accelerate growth.
  • Many other forms of finance require the owner to guarantee the loan. Having your house and car on the line if your business suffers a downturn causes anxiety for many. Sure, you trust your business to continue its success, but retail is a challenging sector with pressures from many sources. Who really knows what’s around the corner. With inventory loans, the worst that can happen is that the inventory is seized and liquidated. You may not want this to happen, but that’s a far better outcome than losing your home.

What are the cons for using inventory financing for your small business?

  1. Applying and getting accepted for an inventory loan is sometimes a long process, and some inventory financing lenders require a tour of your facilities before they are willing to lend you money. The essence of commerce often requires rapid reactions, and months of delay could prove costly to rapidly developing opportunities.
  2. If your credit score is not great or your business’s financial records are up and down or very young, you may not qualify for inventory financing. Or, if you do, it may be particularly expensive.
  3. Short-term lending and the risks involved in inventory financing mean that some lenders impose high rates of interest. This is not always the case, but you should choose your provider with care.

How to Qualify for Small Business Inventory Financing

Because the inventory acts as collateral for the loan, qualifying for inventory financing may not be as difficult as qualifying for long-term bank loans and SBA loans. That’s not to say that a good credit score and proven profitability are not necessary, however. The better those are, the better and cheaper finance you will be able to secure. Most finance companies will want the following:

  • There will always be a credit check for the business and the owner(s).
  • They will ask for financial statements to check your sales and revenue.
  • Many traditional lenders may ask to see a business plan illustrating how you expect your business to grow.
  • They will require a detailed list of exactly what inventory you are buying with the money, often including pricing of those goods.
  • They may want to inspect your facilities to see that your inventory will be stored properly.

These are the basics; they may need more records and checks. As you can guess, the higher the amount you want to borrow, the more requirements you’ll be asked to meet.

How to Apply Inventory Financing for Small Businesses

The application process for inventory financing varies from lender to lender. At traditional loan providers, you may expect significant  paperwork, a lengthy approval process and an inspection of your premises, storage and inventory management system.

By contrast, many online lenders make a feature of simplifying the process allowing you to get your hands on the cash within days – sometimes in just hours.

You likely know best if inventory funding works best for your needs. Of course, all loans carry costs, but are often a crucial element in a growing company’s success, and can often be seen as a bridge to increasing revenue. Choosing your loan provider may require reviewing multiple options, but it is a process you should embrace to return the right match for your business. The right provider will allow your business to run more smoothly with the funding you need.

If your business operates in a position where additional inventory and the working capital to invest in growth would help your company grow, Kickfurther inventory funding may be a good match.

Kickfurther funds your entire landed cost of goods and frequently offers inventory funding  at costs 30% lower than competitors and with higher overall funding limits. This innovative funding platform puts a unique twist on the crowdfunding phenomenon by enabling the general public to donate cash to a company that they support. Inventory financing has never been easier with Kickfurther.  You establish a payment schedule that works for when you expect to receive and begin selling through inventory and don’t owe anything until that date. Our online portal allows you to quickly estimate the amount we can fund with no pressure to proceed.

When you sell your inventory successfully, you pay your buyers, not the bank. Simple, right?

Key Takeaway/Final Thoughts

At the end of the day, whether you’re considering inventory financing or other types of loans, it’s important to do your research and determine which financial product will give you the best loan rates and terms. Choose a financing option that not only offers competitive interest rates but also aids you in achieving your business goals.

How does Small Business Inventory Financing Work?

Connect with consumers across the United States to get your
inventory funded via our marketplace

Create your online account

Create a business account, upload your business information, and launch your deal

Get funded within minutes to hours

Once approved, our community funds most deals within a day, often within minutes to hours, so you’ll never miss another growth opportunity.

Control your payment schedule

We pay your manufacturer to produce inventory. Make the introduction and you’re off and running! Outline your expected sales periods for customized payment terms. At the end of each sales period, submit sales reports and pay consignment profit to backers for each item sold.

Complete and repeat!

Complete your payment schedule and you’re done! Often once the community knows you, you’re likely to get lower rates on your next raise.

How much funding could your company raise?

Submit this form to see your estimate.

Business Form Bottom
US Entity/Owner?

Never miss another growth opportunity with working capital as you need it.

We fund inventory for direct-to-

consumer & major store brands

Recently funded projects

Where you’ve seen us