How to Qualify for Inventory Loans?
How to Qualify for Inventory Loans?
In order to understand if your business will work well with aid from this type of funds, you need to have a good understanding of the requirements for these loans. Below is a discussion on the requirements for inventory financing.
Being Product-Based
Inventory financing depends on the products and goods you sell. Hence the service-based businesses which rely on the performance of their employees are not recommended when trying to access this type of loan. The best examples include manufacturing, wholesale, retail, distribution, and food industries, which are good for this type of financing.
Minimum Time in Business
Inventory financing lenders usually check the inventory records before sanctioning these loans. They require businesses to have been in operation for a minimum of 2 years. Therefore, it is almost impossible for brand new businesses to acquire this funding.
Minimum Lender Requirements
Due to the diligence, paperwork, and extra time needed to complete the process for business inventory loans, the lenders have a minimum requirement for these loans. For instance, many firms have a minimum fixed at $500,000. Besides, they will also check the inventory you are planning to buy.
