Inventory financing is business funding used to buy stock, secured by that stock and repaid as it sells. Keelpark Capital Group, a small-business funding broker in Jackson, Tennessee, helps Madison County retailers and wholesalers compare it with lines of credit and other options, then connects them with lending partners, which make the credit decision and set rates and terms.
| Built for | Buying stock before it is sold |
|---|---|
| Collateral | The inventory itself, with a UCC filing |
| Repayment | Paid down as goods sell, or on a set schedule |
| Madison County retail | 463 employer establishments in 2023 (Census CBP) |
| Madison County wholesale | 162 employer establishments in 2023 (Census CBP) |
| Address | 109 N Church St, Jackson, TN 38301 · (731) 252-4018 |
How inventory financing works
The partner advances part of the cost of the goods. The goods become collateral, recorded in a UCC financing statement. As the stock sells, the business pays the financing down, either per unit sold or on a fixed schedule, depending on the structure.
Because the inventory secures the debt, partners care about what it is and how easily it could be sold if something went wrong. Fast-moving, widely sold goods are usually easier to finance than slow, specialised or perishable ones, and partners typically advance only part of the stock's value.
The turn decides whether it pays
Inventory financing works when goods sell fast enough to repay the financing with margin to spare. Before you ask, look at your own history: how long a typical order sits before it sells, what share ends up marked down, and how much margin is left after the financing cost. If a category reliably takes longer to sell than the financing term, that category is the wrong one to finance.
Floor plans, factoring and other look-alikes
- Floor plan financing (the meaning behind the search 'floor plan financing meaning'): a form of inventory financing for high-value items tracked one by one, where each unit is paid off when it sells. Common for vehicle, boat and equipment dealers.
- Inventory financing vs. factoring: factoring sells or borrows against unpaid invoices after a sale. Inventory financing pays for goods before the sale. Some businesses need both at different points in the cycle.
- A line of credit can also fund stock, without tying the credit to particular goods, if the business qualifies for a large enough limit.
- A merchant cash advance is not a loan and is not tied to the stock; it is collected from future receipts, so its cost should be compared directly.
Madison County retailers and wholesalers in the data
Retail was the county's largest sector by number of employer establishments in 2023, with 463, of which 42.1 percent had fewer than five employees. Wholesale trade added 162 employer establishments, a third of them with fewer than five employees (U.S. Census Bureau, County Business Patterns 2023). Among businesses with no paid employees, there were 738 retail and 140 wholesale businesses in the county in 2024 (U.S. Census Bureau, Nonemployer Statistics 2024).
Those are different programs and years, so the counts should not be combined, but together they describe a stock-carrying business community made up largely of small operators. Funding by industry shows how inventory financing sits beside the options other sectors use.
Collateral, UCC filings and what you sign
Expect a UCC financing statement naming the inventory, and sometimes all business assets. If another lender already holds a blanket lien, the new partner may require that lender's consent or a payoff first. Search your own records first; the Tennessee UCC lien guide explains how.
Read the reporting terms too. Some inventory facilities require regular stock reports or allow inspections, and selling financed goods without paying down the balance as agreed is usually a default.
How to finance inventory: a short checklist
- Pick the categories with the strongest, most predictable sell-through.
- Price the order and the total financing cost per unit.
- Check the payment against your slowest selling month.
- Gather recent bank statements, an inventory list, supplier quotes and sales history.
- Ask whether the financing is per item or a revolving facility, and how early payoff works.
Keelpark Capital Group helps you prepare that file and takes it to partners that finance inventory. See how a request moves for the steps.
By Keelpark Capital Group · Updated