Business loans for buying inventory

Can you get a business loan to buy inventory?

Yes. Inventory is one of the most common uses of business credit, and lenders fund it readily when they can see the stock turning into cash. The questions they ask are simple: how fast does this inventory sell, what did last season look like, and what happens to its value if it does not sell. Stock that turns in 90 days and holds value is easy. Fashion, perishables and custom items are harder, because the collateral can be worthless by spring.

Under a year in business with no prior season, your options narrow to short term loans and revenue based financing sized to current deposits. Retail and ecommerce pages cover the industry specifics.

Which products will consider you, ranked by fit

Ranked by how well they fit inventory:

1. A line of credit, for buying that repeats: draw in September, repay in January, draw again. The cheapest option and reusable.
2. Supplier terms, if your supplier will give net 30 to net 90. Not a loan, and often free.
3. Inventory financing, a loan or line secured by the stock itself, advancing 50% to 80% of cost for a large purchase.
4. Purchase order financing, which pays your supplier directly to fill a confirmed order from a creditworthy customer, then collects from the customer.
5. Revenue based financing, for ecommerce brands funding a production run, repaid as a share of sales.
6. Short term loans, for a one time buy with a fixed payment, when none of the above is open.

Which products will decline you, so you stop wasting applications

Equipment lenders and real estate lenders do not fund stock. Inventory lenders decline perishable, seasonal fashion and custom goods with no resale market, and they decline when your inventory report shows aged stock from prior seasons. Purchase order lenders decline orders from customers with weak credit and orders for services or custom work rather than finished goods. Banks decline lines for businesses under two years or without a prior season to prove the pattern.

A merchant cash advance will fund inventory, but daily repayments start before the stock sells, which is the wrong shape for a seasonal buy. Read loan versus line of credit to match the repayment to your sales cycle.

How to improve your odds in 30, 90 and 180 days

In 30 days: pull a sell through report by product for the last twelve months, get a written supplier quote, and build a simple plan showing the buy, the expected sales by month and when the loan is repaid. Apply early, not the week the order is due.

In 90 days: negotiate supplier terms, even net 30, because every dollar of trade credit reduces what you need to borrow. Keep inventory in the books at cost, separate from personal spending.

In 180 days: with a full season in the statements, apply for a bank line sized to next year's buy so the application becomes a draw. See the document checklist for what to have ready.

What will it cost compared with a standard borrower?

A line of credit for inventory costs the same as any line: 8% to 15% APR at a bank, 10% to 40% online, and only on what you draw. Inventory financing runs 8% to 30% APR plus a field exam or appraisal fee on larger lines. Purchase order financing costs 1.5% to 3.5% per 30 days on the funded amount, so a $200,000 order outstanding for 60 days costs roughly $6,000 to $14,000, which is worth it when the margin on the order is 25% or more and ruinous when it is 10%.

Revenue based financing for a production run prices at factor rates of 1.06 to 1.2. Compare the fee against the gross profit on the stock, not against an APR, because the inventory either sells or it does not. APR versus factor rate explains the comparison.

How to apply

Apply once here with your bank statements, sell through report and supplier quote, and your application reaches line of credit, inventory, purchase order and revenue based lenders together. Or connect your AI assistant to our MCP server through the agents hub and let it read your sales exports, fill the application and submit. It is free to the business, and offers come back to the same place so you can match the repayment to your season.