INVENTORY FINANCING

A credit line or short-term loan secured by a company to purchase products for sale. The products (or inventory) act as the collateral for the loan if the business fails to sell its products and repay the loan. This is especially useful for business that must pay their suppliers in a shorter time period than it takes them to sell these products to customers. This also resolves seasonal fluctuations in cash flows and can support a business to attain a higher sales volume.