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The Top Inventory Options for CPG

The Top Inventory Options For CPG

Guest post by Kickfurther.


Growing your business takes careful planning. If you’re like many small and medium-sized product businesses, allocating financial resources to cover set expenses, investments and finance growth strategies is where creativity and resourcefulness are needed.

Identifying the right resources to fuel your expansion can ensure you get and stay on a growth trajectory. But how do you do this? Business veterans will tell you that hastily selecting partners can set a business back, while avoiding the decision can cause you to miss out on key opportunities for long-term growth. The key to success is to take steps early to put resources in place to support opportunities when they occur.

What Is inventory financing?

Inventory financing is a form of short-term loan, line of credit or funding that gives you the cash to pay your suppliers to produce inventory and then uses the inventory as collateral against funding. Lenders in this space include traditional banks, specialist inventory financing companies or online lenders.

It leverages the resources of a financing partner to pay for inventory production, which is one of the largest expenses many brands report. Funding can be customized to address your business’s exact manufacturing, shipping, and sales timelines so that you don’t make a payment on goods until the inventory sells. This works well with natural cashflow cycles.

The products produced typically act as the collateral for the financing, meaning that if the business reports an inability to repay the funding, the inventory can be sold to cover the debt.

Inventory financing is especially valuable to any business experiencing a significant delay between paying for inventory and receiving payment from retailers. It is also helpful for businesses that want to receive volume-based discounts by placing larger orders to support all of their sales channels. This works best when done on a quarterly or other regular basis and can help to prevent the stock-out issues that hinder growth.

What are the top options when it comes to inventory financing?

Inventory financing may be one of the most powerful tools for any business that deals in large quantities of product. It can be hard to see your cash reserves depleted as you make large purchases of inventory to meet holiday demand or to be a properly supplied wholesaler that is able to keep all of their retailers fully stocked. However, it may be the nature of how your business operates. That is why inventory financing is so important to fill that cash reserve void as you have all your value tied up into inventory. There are many different types of inventory financing. Some may work better than others when it comes to the structure and specifics of your business. Here is a quick breakdown of some of the inventory financing options that you may want to consider for your next loan.

  • Inventory Loan: An inventory loan is the most basic type of inventory financing. A lender evaluates the value of your inventory and lets you use that value as collateral to secure a loan. You then can simply pay back the loan amount in installments, or you can agree to pay back the loan following the sale of the inventory. If you default on the loan, you then sacrifice the inventory to the lender who will then sell it in an attempt to collect on the debt. Typically, once the loan has been repaid and the inventory has been sold, you may need to take out another loan to pay for another batch of product. Ultimately, the only thing you are out on is the interest that you pay to the lender. That interest can be calculated directly into your profit margins, allowing you to set prices that are competitive, that make your business a profit, and that cover the interest on your inventory financing.
  • Inventory line of credit: An inventory line of credit is a revolving line of credit that you can borrow against at any time. Once you enter into a funding partnership with a lender, the lender will allow you to borrow as much money as you need up to a debt ceiling. You continuously make payments and take loans out from the pool of money that the lender has appropriate to your inventory line of credit.  
  • Working capital loan: Working capital loans are designed to give businesses enough cash on hand to cover everyday expenses during periods of time when revenue may be lower. This is ideal for seasonal businesses that see a bulk of their revenue generated in only a few months of the year. When a business owner takes out a working capital loan, most often they are borrowing against their personal credit.
  • Cash advances: If you operate a retail location and you accept credit cards, you may be able to qualify for a merchant cash advance which borrows against a certain percentage of your future credit card sales. You and your business are given an upfront lump sum of money, and in exchange, the lender gets access to a certain percentage of every credit card sale going forward. Usually paid out bi-weekly or monthly.
  • Kickfurther: Kickfurther is the world’s first online inventory financing platform that enables companies to access funds that they are unable to acquire through traditional sources. We connect brands to a community of eager buyers who help fund the inventory on consignment and give brands the flexibility to pay that back as they receive cash from their sales. This alleviates the cash-flow pinch that lenders can cause without customized repayment schedules, allowing your brand to scale quickly without impeding your ability to maintain inventory or financial flexibility.

How do I qualify for inventory financing?

Inventory financing can be a bit more complicated than other types of business financing. The reason being is that you are essentially using your inventory on hand as collateral to secure a loan from a lender. The lender wants to be sure that you are doing everything you can to accurately report the contents of your inventory, and to protect that inventory. Here are some requirements that a lender may ask of a small business looking for inventory financing.

  • A well-managed inventory: A lender will want to see that you have a trusted inventory management system that allows you to keep constant and up-to-date information on quantities, sales, returns, and basically any piece of information that has to do with the movement of inventory through your business. They may also require that you complete a full-audit before applying for the loan. Often an internal audit may not suffice. You may have to pay upfront for the services of a 3rd party auditing service.
  • Protected inventory: If your inventory has a short shelf life, then getting inventory financing may prove more difficult. However, if your inventory can sit on shelves for a long time without issue, then lenders will be more happy to lend you money using your inventory as collateral as long as they see you have taken steps to protect the inventory from potential damage.
  • Open door policy: If you are acquiring inventory financing you should always be prepared for a lender to show up unannounced for a surprise visit to ensure you are doing your best to protect the inventory.
  • Accurate records: Lenders want to see a business that is doing well and that is selling their product. In order to demonstrate a certain level of sales, a business should have accurate sales records.

How Kickfurther can help

For physical product companies (CPG companies), or those producing shelf-stable consumables, a growth funding option that provides larger amounts than traditional financing and at faster speeds is inventory funding with Kickfurther. 

Kickfurther is an inventory funding option, where the manufacturing costs are sent directly to suppliers, and paid back as the inventory sells. This payment system aligns better with natural revenue cycles than does the immediate repayments many traditional and online loans feature. Funding inventory through Kickfurther prevents growing businesses from having to pinch cash on hand and choose between paying for additional inventory or investing in the marketing, equipment, and staff needed to grow.

What are the benefits of working with Kickfurther?

  • 30% lower cost:
      • When you compare our rates to other forms of funding, you’ll often see you’re saving. Companies returning to fund additional deals often see their rates fall each time.
  • Higher funding opportunities:
      • We have an average funding of $78,000 but can fund up to $2MM to manufacture new inventory or get reimbursed for current stock and reinvest in where your business needs it most.
  • Funded In Minutes:
      • Once approved, our community of backers fund most deals within a day, often within minutes to hours.
  • Custom Payment Terms:
      • Businesses create a custom payment timeline of 1-10 months based on their expected sales cycles, with no payments until you start making sales.This alleviates the cash-flow bottleneck lenders cause without customized repayment schedules.


Kickfurther helps CPG businesses grow faster by funding their inventory and allowing them to pay back later as it sells. Brands have funded over $100M in inventory over the past five years with Kickfurther. Companies selling through any combination of direct-to-consumer, online, wholesale, or retail channels use Kickfurther to fund $20,000-$2,000,000 in inventory they’ll repay on a custom timeline of 1-10 months based on their sales cycles.

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