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Inventory Financing Loans: Compare Best Options 2021

Inventory financing can help your small business purchase products to meet customer demand. Compare inventory lines of credit and term loans.

Jackie ZimmermannMarch 30, 2021
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Inventory financing refers to a line of credit or term loan that a small-business owner uses to purchase products to sell. It can help keep your shelves stocked during a busy season, or allow you to buy products in bulk at a discount.

Lines of credit offer more flexibility than term loans and work best for financing ongoing inventory purchases. You get a set amount of money you can tap into as needed, and you pay back only what you’ve borrowed.

Term loans may have higher borrowing amounts and longer repayment periods, making them a better choice for financing large, one-time inventory purchases.

We’ve rounded up the best inventory loans based on financing type. Always compare small-business loans to find the one that best fits your needs.

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Our picks for

Inventory lines of credit

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BlueVine - Line of credit

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Est. APR

15.00 - 78.00%

Min. Credit Score

650

BlueVine's line of credit provides fast working capital for short-term borrowing needs. NOTE: BlueVine has temporarily paused applications for this product to prioritize PPP funding.

Pros

  • Cash can be available within 12 to 24 hours.
  • Multiple term lengths for different financing needs.

Cons

  • Short repayment term results in higher payment amounts.
  • Requires personal guarantee.
  • Not available in North Dakota, South Dakota or Vermont.
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Qualifications:

  • 6-month line of credit
  • Minimum credit score: 650.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $360,000.
  • 12-month line of credit
  • Minimum credit score: 650.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $360,000.

Our picks for

Inventory loans

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Credibility Capital - Online term loan

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Est. APR

6.99 - 24.99%

Min. Credit Score

650

Credibility Capital offers low-cost business loans that work best for small-business owners with strong credit.

Pros

  • Competitive rates among online lenders.
  • No prepayment penalty.
  • Extra monthly payments can save interest cost.

Cons

  • Requires high minimum credit score and revenue.
  • Requires business lien and may require personal guarantee.
  • Not available in Nevada, North Dakota, South Dakota or Vermont.
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Qualifications:

  • Minimum credit score: 650.
  • Minimum time in business: 2 years.
  • Minimum annual revenue: $200,000.
  • No bankruptcies in the past 5 years.
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OnDeck - Online term loan

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Est. APR

9.00 - 99.00%

Min. Credit Score

600

OnDeck offers a fast term loan for small-business owners with less-than-stellar credit who want to expand.

Pros

  • Cash can be available within the same business day.
  • Requires low minimum credit score.
  • Less paperwork than most lenders.

Cons

  • Fixed-fee structure means early repayment will not save interest.
  • Requires frequent (daily or weekly) repayments.
  • Requires business lien and personal guarantee.
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Qualifications:

  • Minimum credit score: 600.
  • Minimum time in business: 1 year.
  • Minimum annual revenue: $100,000.
  • No bankruptcies in the past 2 years.

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Summary of Inventory Financing Loans: Compare Best Options 2021

LenderBest ForEst. APRMin. Credit ScoreNext Steps

BlueVine - Line of credit

Best for Inventory lines of credit15.00 - 78.00%650
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Credibility Capital - Online term loan

Best for Inventory loans6.99 - 24.99%650
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OnDeck - Online term loan

Best for Inventory loans9.00 - 99.00%600
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Inventory lines of credit

If you want fast cash: BlueVine provides a line of credit of up to $250,000, and funding can be available within 12 to 24 hours.

If you have small recurring purchases: You may want to consider a business credit card. Your credit limit may be smaller than a line of credit, but advantages include rewards, cash back and an introductory 0% APR period. You can qualify based on your personal credit score even if you don’t have an established business.

Inventory loans

If you have strong credit and want competitive rates Online lender Credibility Capital requires a personal credit score starting at 650 to qualify, and you’ll need at least two years in business and a minimum of $200,000 in annual revenue.

If you want quick approval and ease of application: OnDeck’s term loan application takes less than 10 minutes, and loans can be transferred to a business bank account as fast as 24 hours. Its minimum personal credit score requirement of 600 is lower than the one at Credibility Capital.

Compare small-business loans

For a look beyond inventory loans, check out NerdWallet’s small-business loans round-up. We gauged lender trustworthiness, market scope and user experience, among other factors, in making these picks.

Last updated on April 29, 2021

To recap our selections...

NerdWallet's Inventory Financing Loans: Compare Best Options 2021