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5 Things You Didn’t Know About Inventory Financing

April 15, 2019

In business, cash is king. Without it, you couldn’t grow. But cash flow isn’t always reliable, especially in ecommerce when your income is tied up for two weeks or longer. Which is why many marketplace sellers turn to financing. But is financing right for your business?

To help you make more sense of this space and see how you can take your business to the next level, here are five things you didn’t know about inventory financing.


1. Business Financing is Different Than Personal Financing

When you’re assessing your financing options, it’s important to consider all types. That said, you should really only focus on business financing options — not personal loans. With a personal loan, there is much more liability and you stand to lose money and other personal assets (like your home or car) if you’re not responsible. Not only that, you put your personal credit score at risk which could affect your chances of getting any type of financing in the future.

Business financing, however, is designed to help you grow. First, you won’t even get approved unless your business is in good standing and has the potential for growth. Second, you use the financing to invest in areas that will take your business to the next level.

2. Opportunity Cost of Not Getting Financing is High

In ecommerce, it’s easy to leave money on the table. On one hand, when you don’t get paid in real-time, you could miss out on certain growth opportunities, like a supplier’s flash sale on inventory that, if leveraged, would allow you to increase your margins. On the other hand, if you aren’t able to replenish inventory as you need it, you risk stocking out, losing sales, and putting your selling status at risk.

But when you have financing, you can take advantage of those last-minute supplier deals and more efficiently manage inventory as demand changes. Which of course means bigger margins and faster growth. So when you think about financing in these terms, the cost of missing opportunities or stocking out is likely much larger than the cost of your loan. Not to mention, you stand to make back its cost (and then some!) after you’ve invested it in your business’ growth.

3. You Can Invest in Proven Products

Financing is such an asset when you want to invest more in a proven product and maximize your inventory management. After you’ve tested a product and seen its potential, you’re going to need a lump sum of cash to invest in larger quantities of it now and to maintain inventory levels in the future/as demand requires. The last thing you want to do is stock out of a popular item that you’ve just invested in so much.

4. Financing Can Give You a Competitive Edge & Help Your Business Scale

When you are able to take advantage of unexpected growth opportunities, you’re simultaneously giving yourself a leg up on your competition. After all, you’re able to more quickly maximize your margins, replenish inventory, meet growing demand and more. All of this leads to a more scalable and more profitable business.

5. You Can Get Financing in 24 Hours

Not only that, you can get financing as soon as tomorrow based solely on your Tophatter sales performance and account health (no credit checks!). Payability, a financing company for marketplace sellers, provides a variety of solutions to help you maximize cash flow and grow your business.

Need a large lump sum of cash to invest in big opportunities? Try Payability Instant Advance. Looking for daily payouts of your income in real-time? Look into Payability Instant Access. Looking for access to your cash on weekends and holidays? The Payability Seller Card might be right for you. You can use one solution or combine them to really maximize your cash flow and growth.

And remember what we were saying above about financing giving you a leg up on competition? Well the 2,500+ marketplace sellers that have used Payability since 2016 have grown their businesses 2.5x faster than their competitors. One of them, Gina Goldring, grew her Amazon business by 50% in one month after her first Instant Advance.

Learn more about Payability at www.payability.com. You’ll receive a $200 sign on bonus when you sign up for Instant Access just for being referred by Tophatter.

By Victoria Sullivan, Payability