Buying inventory when and how is a major challenge for many retail businesses. This is particularity important for startup retailers who need adequate inventory to up and running. If you can plan your inventory purchase, it will helps in beating the competition by reacting to customer demands. It will also help you in planning ahead for peak shopping times of the year. But, before you plan to buy that inventory purchase you need to have enough cash in hand. If you don’t, where are you going to get the cash for inventory purchase?
A small business loan can be use in such conditions. Making a purchase is an ordinary reason for small business borrowing, but many try hard to get a bank loan, particularly if they are startups. Also, startups are unwilling to use their credit cards to purchase inventory due to high interest rates. Luckily, there are short-term financing options available for retail businesses.
You can get a short-term small business loan or a credit line as inventory loans. Such financial options are specifically designed for small businesses to purchase inventories. Three things about inventory loans a small business should know:
Best for Established Businesses:
Inventory loans are mainly designed for established businesses that have a proven track sales record. If you’re a startup, you might not be able to get a loan since lenders are interested in your business sales records. In order to buy your initial inventory as a startup, you might have to gamble on other financing sources, your credit cards, or savings.
Inventory loans work fast– usually within few days – which enables businesses to buy inventory as and when needed to make it readily available for customers once demand increases. Also, inventory loans are ideal financing option for seasonal retail businesses. In your peak season, you can instantly get a small business loan to manage customer demands and pays it off from the sales proceeds.
Cash Flow Flexible:
Another main advantage of inventory loans is that they help as cash management tool by funding your critical business operations. If your short term inventory needs can be easily met with an inventory loan, the additional cash for be used for other ongoing expenses or payroll. Inventory loans not only help in inventory purchase but, also provide extra financial flexibility in business operations.
If your business cash flow is stressed or you need to make extra Inventory purchase during your peak season, inventory loans are significant financial support for your retail business. Small business loans are an ideal financial option to keep your stores well-stocked and keep playing in the field – resulting in more earnings, happier clientele and flourishing business.