Inventory financing is business funding used to buy stock, with the inventory itself as collateral; it is paid down as goods sell or on a set schedule. Glenford Financial, a small-business funding broker in San Angelo, TX, helps Tom Green County retailers and wholesalers judge the fit and connects them with lending partners, which make the credit decision and set rates and terms.
| Built for | Stock bought before it sells |
|---|---|
| Collateral | The goods themselves, typically noted in a UCC filing |
| Repayment | Paid down as stock sells, or by set installments |
| Key test | Does the stock sell before payments come due? |
| Who decides | The lending partner, not Glenford Financial |
| Office | 15 W Beauregard Ave, San Angelo, TX 76903 · (325) 241-0824 |
How inventory financing works
A lending partner advances money to buy inventory, and the inventory secures the financing. The partner usually advances only part of the stock's value, because goods on a shelf are worth less to a lender than to you: they may sell slowly, go out of season or need marking down. As the goods sell, the business pays the financing down, either item by item or through regular payments on a schedule.
Partners structure it in several ways: an inventory loan for a single large purchase, an inventory-secured line of credit that rises and falls with stock levels, or financing tied to specific units, known as a floor plan. The partner chooses which structures it offers and on what terms.
How to finance inventory: four routes compared
| Route | How it works | Watch for |
|---|---|---|
| Supplier terms | The vendor lets you pay 30 or 60 days after delivery | Often the cheapest route; ask before borrowing elsewhere |
| Inventory loan | One advance for a specific purchase, secured by the goods | Payments that start before the stock sells |
| Inventory-secured line of credit | Draw as you restock, pay down as you sell | Regular inventory reports and possible audits |
| Merchant cash advance, which is not a loan | Lump sum in exchange for future receipts | Total collected is usually much higher than a loan's cost |
If you restock every few weeks, a business line of credit may fit better than a series of separate loans. If the gap is broader than stock, such as payroll and rent as well, compare working capital financing.
Turn rate decides the fit
Inventory financing works when the goods sell faster than the financing comes due. To check, divide the cost of goods you sold last year by your average inventory at cost; that is how many times stock turned over. Divide 365 by that figure for the average number of days an item sits before selling.
A hypothetical, for illustration only: a store sold goods that cost it four times its average stock level last year. Its stock turned four times, so an average item sat about 91 days. Financing with payments starting in 30 days would be paid from other cash for two months; financing paid down as items sell, or with a term comfortably past 91 days, would match the goods. Slow-moving or seasonal lines deserve a separate look, because they hold up the average.
Floor plan financing, in brief
Floor plan financing meaning, in one sentence: each financed item, such as a vehicle, trailer or large appliance, is tracked individually and paid off when that item sells. Dealers of high-value goods use it. Partners commonly require regular stock checks, and if a unit sits unsold past a set period the agreement may require partial payments on it, often called curtailments. It is a specialised form of inventory financing and suits only businesses that sell identifiable, serial-numbered goods.
Inventory financing vs. factoring
The two fund opposite ends of the sale. Inventory financing pays for goods before they sell, secured by the goods. Factoring sells the invoices a business has already issued, so the factor collects from your customers and you receive most of the invoice value early. A wholesaler that sells on 30- or 60-day terms might look at both: one to buy stock, the other to shorten the wait for payment. Factoring is not among the six funding types Glenford Financial covers.
Retailers and wholesalers in Tom Green County
Retail trade was Tom Green County's largest sector by number of employer establishments in 2023: 416 establishments employing 6,698 people, with an annual payroll of $244.5 million (U.S. Census Bureau, County Business Patterns 2023). The county also had 129 wholesale trade establishments employing 1,410 people (same source). In ZIP 76903, which covers much of central San Angelo, TX and includes the office, 148 employer establishments were retailers and 53 were wholesalers (U.S. Census Bureau, ZIP Code Business Patterns 2023). Another 673 retail businesses in the county operated with no paid employees in 2024 (U.S. Census Bureau, Nonemployer Statistics 2024).
Those are the businesses for which stock is the largest asset on the books, and the ones this page is written for. Funding by industry covers the other sectors partners work with.
Collateral, UCC filings and reporting
Because the inventory secures the financing, partners usually record their claim by filing a UCC financing statement with the Texas Secretary of State. If another lender already holds a blanket lien on all business assets, including inventory, a new partner may decline or ask that lender to subordinate. The Texas UCC search guide shows how to check your own record first. Expect reporting duties too: periodic inventory reports, sometimes a borrowing-base certificate that ties the available amount to current stock, and the right for the partner to inspect.
What partners review
- Sales history, often from bank statements and point-of-sale reports
- An inventory report: what you hold, at cost, and how long it has been on hand
- Supplier invoices or the purchase order for the stock you want to buy
- Existing liens and debts
We help you show how quickly the stock turns and send the request to partners that offer inventory financing. See how a request moves.
By Glenford Financial · Updated