How to raise capital without a trip to the bank
Don Hesh
May 18, 2023
Small businesses might be getting the cold shoulder from traditional lenders, but there are other options worth considering. With many
Inventory Finance
Access cash from the stock held in your inventory.
Balancing the competing priorities of holding just enough inventory to avoid production outages, while maintaining a healthy cash flow is a challenge many businesses know all too well. Unlock the working capital tied up in your inventory stock with OptiPay’s inventory finance funding solution.
Release Cash from your
stock on hand
Inventory Finance aka Stock Finance is another form of working capital finance that allows your business to borrow against the value of the inventory you are holding in your warehouse. For many businesses, their stock on hand (inventory) may well be their largest asset and whilst it is sitting in your warehouse (prior to it being sold), it has value that you can access funding against, so why not establish a line of credit secured by your inventory to help drive your business growth.
How inventory Finance Works
Depending on the type of inventory (eg: perishable products are not suitable, nor is capital equipment); The Stock Turn Days; The stock management system that you utilise, and general accounting procedures of the business, OptiPay will be able to assess if your business is suitable (which may require an independent valuation of the stock depending on its age).
Based on the valuation a credit limit will be determined by OptiPay and you can draw down funds to purchase new stock. As the stock is sold and debtor payments collected, the Inventory Finance Line of Credit is paid down. You can then draw again and the cycle repeats.
Inventory Finance is provided to established businesses having at least 3 years of trading history and must be profitable.
Inventory Finance works in conjunction with our Invoice Finance (Line of Credit) product so as you raise invoices, you then repay this revolving facility from your available funds.
Benefits Of Inventory Finance
The Pros
- Releases cash against stock on hand
- The Inventory Finance facility is confidential
- Stock finance can provide significant capital injection and ongoing working capital
- Allows your business to purchase more stock and drive growth
- Suitable for seasonal businesses
- Not only finished product but also raw materials can be financed (subject to credit assessment)
The Cons
- It is a relatively short term facility (linked to the movement of our stock)
- Inventory Finance is more expensive than Invoice Finance
- Not all businesses with stock on hand will qualify. Your business needs to be profitable with good accounting and stock management process and systems
- The credit assessment process is more complex and detailed when compared to Invoice Finance
- You will be required to do regular stock audits, and provide us with stock movement reports
Quick Online Enquiry
It will only take a few seconds & will not affect your credit rating.
Note: OptiPay funding solutions are only suitable for businesses with annual revenues of $1m+ per annum.
Note: OptiPay funding solutions are only suitable for businesses with annual revenues of $1m+ per annum.
For more information about how OptiPay can help accelerate your business growth please Get in touch today.
Here’s why Our Clients choose OptiPay
This is Paul, he is one of the directors of UVS, a labour-hire provider to the construction industry. Here’s what he has to say about how OptiPay was able to help his business grow and succeed. Contact an OptiPay expert today to see how we can help you.
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