What is inventory financing?

Inventory financing basically consists of two forms. First of all, it long-term credit. As the name suggests, this is suitable for ongoing support. Here, you withdraw money when necessary and only pay interest on what you withdraw. This long-term loan is generally used to finance “iron stocks”. This is the minimum amount of inventory you need to stay in business.

And then there is the business loan. This loan is suitable for periodic and/or seasonal purchases. This loan is short-term and is therefore suitable for absorbing peak times, such as the holidays. After all, it is not necessary to continuously pay the costs of a long loan if you only have to make large purchases at (a) certain time (s). The amount of this amount is usually equal to the purchase value.

Inventory financing in the form of a short-term business loan is the smartest option to temporarily create additional financial space, for example for purchasing your inventory.

When to fund your inventory?

• _when you get a discount when you place a large order.
• You want to stock up on extra inventory before the holidays or during the sale.
• Wants to buy a new range.
• You are going to expand your business and can therefore sell more product range.

Benefits of inventory financing

• You can invest directly in the growth and development of your company.
• Working capital doesn't take a hit, so you can still continue to meet your financial obligations.
• The generated turnover compared to the financing is easy to identify.

Disadvantages of inventory financing

• You have to pay interest and repayment each month.
• When your inventory has become less valuable, financing can actually cost you money instead of generating anything.

Prepare your application in three steps

Good preparation is half the work! To prepare your application in the best possible way, you can complete three steps. So you know exactly what you need and what to expect.

Step 1 — Determine the amount of funding

How much will you buy? If you already have a good idea of this, you know exactly how much funding you need. Of course, it is also possible that you deposit part yourself. Then you apply for funding for the remaining part.

Step 2 — Determine the duration

In what period do you want to have paid off the financing again? For fast-selling inventory, it's best to opt for a number of months. If inventory doesn't sell out so quickly, it's best to choose a term of one year.

Step 3 — Research different funders

Which financier best suits your needs? Compare different providers by term, conditions for applying for a loan and the additional costs. This is how you can do global with Swishfund calculate what you can borrow and what the additional costs will be.

Business loan for your inventory

Swishfund is happy to help you with a business loan to ensure that you can keep buying inventory. you can pay off a business loan in 2 ways: daily debit or automatic debit card processing.

The latter option is attractive for retailers. You pay back via your card machine, more on busy days than on days when you have little turnover. Every day, a fixed percentage of your PIN turnover is skimmed completely automatically. This way, you can pay off a little bit every day as you can. How convenient is that?

Do you have questions about our business loans after reading this blog? Contact one of our advisors directly via 085 064 4111. And do you want to apply for funding there? It will be arranged within 10 minutes. Click the button below.