What Is Inventory Finance?

Inventory finance is a type of asset-based lending where businesses use their inventory as collateral to secure funding. This allows businesses to unlock the value of their stock without needing to sell it. The funds can then be used to purchase additional inventory, manage operating costs, or invest in business growth.

How Does Inventory Finance Work?

With inventory finance, lenders will assess the value of your inventory and offer you a loan based on a percentage of that value. Typically, lenders offer up to 80% of the stock's value, although this can vary depending on the lender's criteria.

Once you receive the funding, you can use it for any purpose that supports your business, from replenishing stock to covering operational costs. As you sell your inventory, you repay the loan, either in instalments or in full, depending on your agreement with the lender.

Benefits of Inventory Finance for Retail and Ecommerce Shops

1. Improved Cash Flow
   Inventory finance helps unlock the cash tied up in stock, allowing you to use that capital for other essential business activities, such as marketing, hiring staff, or upgrading technology.

2. Flexibility
   Whether you’re looking to stock up for a busy season, purchase in bulk at discounted rates, or balance cash flow gaps, inventory finance gives you the flexibility to make strategic decisions without being held back by cash constraints.

3. Access to More Stock
   With the ability to access additional funding, you can purchase more stock, ensuring that you have the right products available to meet customer demand. This can also be useful for expanding your product range or diversifying your inventory.

4. Faster Access to Capital
   Compared to traditional loans or lines of credit, inventory finance can provide faster access to the capital you need, allowing you to take advantage of time-sensitive opportunities in the market.

5. No Need for Personal Guarantees
   Unlike some other forms of business financing, inventory finance typically doesn’t require personal guarantees or assets outside of the inventory itself. This means you can access funds without risking your personal property.

Is Inventory Finance Right for Your Business?

Inventory finance is ideal for businesses with significant stock turnover but limited cash flow. This includes retail shops, eCommerce businesses, wholesalers, and distributors. If you find that your cash flow is often constrained by inventory purchasing, or if you’re looking for a more efficient way to manage your stock, inventory finance could be the right solution for you.

At EP Finance, we specialise in providing tailored financial solutions, including inventory finance, to help businesses stay competitive and thrive. Our team will work with you to assess your business's needs and find the best funding option to support your growth and cash flow.

Get Started with EP Finance Today

If you’re interested in finding out more about inventory finance and how it can benefit your retail or eCommerce business, get in touch with EP Finance today. We offer tailored funding solutions designed to help you optimise cash flow, manage your stock, and grow your business.