Inventory financing is a form of asset-based lending that allows businesses to use inventory as collateral to obtain a revolving line of credit. This line of credit can be used to purchase additional inventory or to help a business get through seasonal fluctuations in cash flow, among other situations.

Retailers and wholesalers alike can experience many benefits, including:

Help keep shelves stocked

To continue to attract customers, and have product to sell, retailers will need to have product on the shelves. For small- to medium-sized businesses with limited available capital, this can be difficult to do. However, with inventory financing, these companies are able to use the revolving line of credit to borrow on inventory and have the funds needed to keep their shelves stocked.

Provide financing when a bank says “No”

Another instance where small businesses might find this type of asset-based lending beneficial is when they are turned away from a bank. Small- to medium-sized retailers, as well as wholesalers with poor credit history or inadequate cash flow, might find it difficult to obtain financing from a bank. However, this isn’t the case with Crossroads inventory financing, as it allows a company to use current product as collateral.

Assistance during periods of lagging cash flow

While retailers see an influx of business during the holiday season, there are other periods during the year where sales may not be as high. During these times, cash flow could be lagging, which can make operating at normal levels difficult. Businesses that experience periods of slow cash flow can talk to Crossroads Financial for assistance.

Stand-alone Inventory lines of Credit are for borrowers who were traditionally ignored by larger Asset-Based Lenders and Banks. With many lenders reluctant or unwilling to lend against Inventory, preferring to focus on Accounts Receivable, we saw an opportunity in the marketplace to provide a value-added service to these lenders and become their partners in their transactions, not their competition. Through these relationships, we have built an extensive network of lending relationships with factors, receivable lenders, and other asset based lenders who bring us the Inventory component of their transactions, while they focus on the Accounts Receivable, Equipment, or other assets. Please see below for some highlights of our Inventory Financing program:

• Stand-alone Inventory lines of Credit for Borrowers traditionally ignored by Asset-Based Lenders and Banks
• Revolving lines of credit on existing inventory of $500,000-$5,000,000+
• Direct lender that will fund up to 50 percent of cost or 75 percent of Net Orderly Liquidation Value
• Inventory revolving lines available in the United States and Canada

Companies that think Crossroads Financial could help them grow their business should contact us for more information.

Crossroads is pleased to announce Crossroads Financial Retail– a new stand-alone Inventory Financing program for retail stores. Traditional lenders find lending against Inventory for a retail difficult or ignore the retail space under $5,000,000. Crossroads is pleased to announce that it has developed a program to assist these retails with working capital lines of credit starting at $500,000.

Crossroads Financial Retail:

• Inventory Lines of Credit Starting at $500,000 – $6,000,000
• Advance up to 50% of Cost
• Revolving Credit facility that can grow with the business
• Any Inventory qualifies! (except expensive Jewelry)
• Can Fund Multiple Locations, Inventory in Transit, and Warehoused Inventory

Examples of Current Retail Clients:

• $2,000,000 Revolving Credit Line for a chain of arts & crafts stores in the Midwest. The client, forced to leave a traditional bank after breaching loan covenants, turned to Crossroads to provide a working capital line of credit to assist in the turnaround of the business.
• $500,000 Revolving Credit Line for an Adult Toy and Personal Care Online retailer. The company, experiencing rapid growth with a large increase in business, turned to Crossroads to provide an Inventory line of credit to assist in procurement of Inventory to meet growing consumer demand.
• $500,000 Revolving Credit Line for an Online Distributor of Nutritional Supplements.The company, needing a line of credit to acquire competitors and grow the brand, turned to Crossroads to provide the Inventory Revolving facility and was able to increase web-presence, adding new revenue streams and increasing sales.

For more information, please contact Jarrett Levy at (561) 997-8627 or email [email protected]. We work with intermediaries and consultants. Learn how you can increase your business today with Crossroads Financial.

Long lead times for new products, may have to carry 2-3 months supply of inventory on hand in which a lot of money is tied up in inventory. This lack of availability could make it difficult to fund the impending production cycle. During times of lagging cash flow, businesses could also struggle to cover overhead expenses such as rent or payroll. Businesses should talk to Crossroads for assistance in acquiring the cash flow necessary for sustainability and growth.