Aspenhollow Business Capital, based in Olympia, WA, arranges inventory financing through funding partners for Thurston County retailers, parts counters, dealers and trades that buy stock ahead of demand. This page explains how inventory financing works, floor plan financing, how it compares with factoring and lines of credit, and what partners review.
| Covers | Stock bought ahead of sales |
|---|---|
| Secured by | Usually the inventory itself |
| Repayment | As goods sell, or on a schedule |
| Related | Floor plan financing for dealers |
| Thurston County, WA retail employers | 767 establishments (CBP 2023) |
Inventory purchases ahead of demand: paying before customers buy
Stock has to be paid for before customers buy it. A boutique orders a season's line months ahead; a parts counter keeps common filters and brakes on hand; a plumbing contractor buys water heaters in quantity. Inventory financing covers that purchase so cash is not tied up on the shelf.
A business loan to purchase inventory works when you can show the stock turns. Partners want to know what you are buying, how quickly similar stock has sold before, and what happens to unsold goods. A request for a boutique's inventory, for example, can be reviewed against last year's sell-through by category instead of a single total.
How inventory financing works
The partner advances part of the inventory's value, often paying the supplier directly. The inventory secures the funding. As goods sell, the business repays, either item by item or on a fixed schedule. Partners may advance less than the full wholesale cost, because stock can lose value if it does not sell.
A hypothetical example, for illustration only: a gift shop orders $30,000 of stock that has historically sold through in about four months. A partner advances part of the cost, and the shop repays from monthly sales over that window. If half the order sits unsold at month four, the shop still owes the balance, so ordering conservatively matters.
Floor plan financing meaning
Floor plan financing is inventory financing for high-value items with serial numbers: vehicles, boats, large equipment. Every unit carries its own financing, cleared when that unit is sold. Partners audit the lot or floor regularly to confirm units are on hand. Thurston County, WA had 19 automobile dealer establishments in 2023 (CBP 2023); dealers are one example of businesses that use floor plan financing.
Inventory financing vs factoring
Inventory financing pays for goods while they are still on the shelf. Factoring sells invoices after the sale, so a business waiting on slow-paying customers can turn invoices into cash before they are paid. A distributor may use both at different points in the same cycle. We do not arrange factoring; if receivables are the bottleneck, a line of credit is the option we can compare.
Inventory financing vs a line of credit for stock
A line of credit can also buy stock, and it can be used for anything else too. Inventory financing is narrower but tied to the goods, which may matter to partners when the business is young or the purchase is large. If stock buying repeats every month in similar amounts, a line may fit. If it is one large order ahead of a strong period, dedicated inventory financing can fit better.
Inventory-heavy businesses in Thurston County, WA
Retail Trade had 767 employer establishments in Thurston County, WA in 2023 (CBP 2023), including 71 clothing and accessories stores, 70 grocery stores, 66 building material and garden supply dealers and 36 furniture stores. Auto repair shops carry parts too; the county had 124 auto repair and maintenance establishments (see auto repair shop funding). Plumbing and HVAC contractors stock fixtures and units; see plumbing and HVAC funding. Olympia, WA figures are on the city page.
Settle these before the purchase order goes out
- How many weeks has similar stock taken to sell in the past?
- What happens to stock left over at the end of the selling window?
- Does the supplier offer its own terms, and do they conflict with a partner's lien?
- Will the partner pay the supplier directly?
- Is the order a one-time purchase or a monthly pattern?
The answers decide whether dedicated inventory financing, a credit line, or simply a smaller order is the better move. Partners may ask similar questions.
Inventory financing: documents partners look at
- Supplier quotes, or purchase orders already issued
- Inventory reports and turnover history
- Business bank statements
- Existing liens on inventory
- Time in business and revenue range
How a request moves covers the steps; the comparison page lists the alternatives.
By Aspenhollow Business Capital · Updated