How much do you need?
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Here are 5 inventory financing loans
Lender | NerdWallet Rating▼ | Max loan amount▼ | Min. credit score▼ | Next steps |
---|---|---|---|---|
SBA 7(a) loan with Fundera by NerdWallet | Best for SBA inventory financing | $5,000,000 | 650 | with Fundera by NerdWallet |
Bluevine - Line of credit with Fundera by NerdWallet | 5.0/5 Best for Inventory lines of credit | $250,000 | 625 | with Fundera by NerdWallet |
OnDeck - Line of credit with Fundera by NerdWallet | 5.0/5 Best for Inventory lines of credit | $100,000 | 625 | with Fundera by NerdWallet |
Fora Financial - Online term loan with Fundera by NerdWallet | 4.5/5 Best for Inventory loans for borrowers with bad credit | $1,500,000 | 500 | with Fundera by NerdWallet |
Fundbox - Line of credit | 5.0/5 Best for Startup inventory financing | $150,000 | 600 | Read Review |
Here are 5 inventory financing loans
Best for SBA inventory financing
Best for Inventory lines of credit
Best for Inventory loans for borrowers with bad credit
Best for Startup inventory financing
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Our pick for
SBA inventory financing
SBA 7(a) loans are issued by banks and credit unions and secured by the U.S. Small Business Administration. These loans have long terms and low interest rates but require strong credentials to qualify.
SBA 7(a) loan
Max loan
$5,000,000
Min. Credit score
650
Apr range
11.50-15.00%
Our picks for
Inventory lines of credit
These online lenders offer fast lines of credit and repayment terms up to 12 months. You may be able to qualify with a credit score of 625 or higher.
Bluevine - Line of credit
Max loan
$250,000
Min. Credit score
625
Apr range
20.00-50.00%
OnDeck - Line of credit
Max loan
$100,000
Min. Credit score
625
Apr range
39.90-77.90%
Our pick for
Inventory loans for borrowers with bad credit
Fora Financial offers inventory loans that can be used for a variety of purposes. You may be able to qualify with a credit score of 500 or higher.
Fora Financial - Online term loan
Max loan
$1,500,000
Min. Credit score
500
Our pick for
Startup inventory financing
Fundbox provides short-term lines of credit with funding as fast as the next business day. You need only six or more months in business to qualify.
Fundbox - Line of credit
Max loan
$150,000
Min. Credit score
600
Apr range
36.00-99.00%
What is inventory financing?
How does inventory financing work?
- Purchase inventory to prepare for your busy season.
- Cover short-term cash flow gaps.
- Buy additional stock to meet increased customer demand.
- Update product offerings or launch products.
- Purchase products in bulk at a discount.
Types of inventory financing
Inventory loans
Inventory lines of credit
Pros and cons of inventory financing
Pros
- Self-collateralizing. You may not need to rely as much on personal credit, time in business or other forms of collateral to qualify for financing.
- Good for sales. Inventory financing can be used to meet increased customer demand, prepare for a busy season or upgrade a product line.
- Easy application process. If your inventory records are organized, it can be quick and easy to apply for this type of financing, especially when working with an online lender.
Cons
- Limited loan amounts. Lenders will typically offer only a percentage of the total cost of the inventory you’re looking to purchase.
- Expensive. Business loan rates can be high on this type of financing, especially if you have a lower credit score, have less time in business or aren’t using other assets to secure the loan. Although your business still may be able to qualify, the cost of borrowing will be much higher.
How to get inventory financing
- Business and personal bank statements.
- Business and personal tax returns.
- Business financial statements (e.g., profit and loss statement, balance sheet).
Alternatives to inventory financing
- Invoice financing or factoring: Both invoice financing and invoice factoring can help cover gaps in cash flow by advancing money on your unpaid customer invoices. With invoice financing, your unpaid invoices serve as collateral on a loan until your customer pays you. With factoring, a company purchases your unpaid invoices at a discount, and takes over collecting the money from your customers.
- Business credit card: Similar to a line of credit, a business credit card is a revolving line that only charges interest on money you have spent on the card. As you pay down the card, you can spend money on it again.
- Purchase order (PO) financing: Similar to inventory financing, purchase order financing is a lump sum of money that can be used to cover cash flow gaps. While inventory financing can be used for general inventory needs, however, PO financing is tied to the needs of a specific purchase order.
Find the right business loan
Methodology
Wondering if you qualify?
It’s possible to get a business loan even if you have bad credit. Bad-credit business loans are available from alternative sources, like online or nonprofit lenders.