Inventory Financing

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Dictionary Says

Definition of 'Inventory Financing'

A line of credit or short-term loan made to a company so it can purchase products for sale. Those products, or inventory, serve as collateral for the loan if the business does not sell its products and cannot repay the loan. Inventory financing is especially useful for businesses that must pay their suppliers in a shorter period of time than it takes them to sell their inventory to customers. It also provides a solution to seasonal fluctuations in cash flows and can help a business achieve a higher sales volume - for example, by allowing a business to acquire extra inventory to sell during the holiday season.
Investopedia Says

Investopedia explains 'Inventory Financing'

Lenders may view inventory financing as a type of unsecured loan because if the business can’t sell its inventory, the bank may not be able to either. This reality may partially explain why, in the aftermath of the credit crisis of 2008, many businesses found it more difficult to obtain inventory financing.

Search results for

'Inventory Financing'

  • Earnings Quality: Investigating The Financing Of Accruals ...

    http://www.investopedia.com/university/accounting-earnings-quality/earnings8.asp
    ... A company that is financing an inventory glut, versus a healthy inventory expansion,
    will have little cash from sales to extinguish payables. ...

  • CFA Level 1 Study Guide - Liabilities - Types Of Off-Balance-Sheet ...

    http://www.investopedia.com/exam-guide/cfa-level-1/liabilities/off-balance-sheet-financing-types.asp
    ... 8.10 Effects of Inventory Accounting; 8.11 Causes a Decline in LIFO Reserve; 8.12 ...
    9.20 Types Of Off-Balance-Sheet Financing; 9.21 Effects Of Off-Balance Sheet ...

  • CFA Level 1 Study Guide - Liabilities - Effects Of Off-Balance ...

    http://www.investopedia.com/exam-guide/cfa-level-1/liabilities/off-balance-sheet-financing-ratio-effect.asp
    ... 8.10 Effects of Inventory Accounting; 8.11 Causes a Decline in LIFO Reserve; 8.12 ...
    9.20 Types Of Off-Balance-Sheet Financing; 9.21 Effects Of Off-Balance Sheet ...

  • CFA Level 1 Study Guide - Fixed Income Investments - Institutional ...

    http://www.investopedia.com/exam-guide/cfa-level-1/fixed-income-investments/institutional-investors-financing-purchases.asp
    ... 8.10 Effects of Inventory Accounting; 8.11 Causes a Decline in LIFO Reserve; 8.12 ...
    9.20 Types Of Off-Balance-Sheet Financing; 9.21 Effects Of Off-Balance Sheet ...

  • CFA Level 1 Study Guide - Assets - Inventory Valuation ...

    http://www.investopedia.com/exam-guide/cfa-level-1/assets/inventory-valuation.asp
    ... 8.10 Effects of Inventory Accounting; 8.11 Causes a Decline in LIFO Reserve; 8.12 ...
    9.20 Types Of Off-Balance-Sheet Financing; 9.21 Effects Of Off-Balance Sheet ...

  • CFA Level 1 Study Guide - Corporate Finance - Signaling Prospects ...

    http://www.investopedia.com/exam-guide/cfa-level-1/corporate-finance/signaling-prospects-financing-decisions.asp
    ... 8.10 Effects of Inventory Accounting; 8.11 Causes a Decline in LIFO Reserve; 8.12 ...
    9.20 Types Of Off-Balance-Sheet Financing; 9.21 Effects Of Off-Balance Sheet ...

  • CFA Level 1 Study Guide - Assets - Effects of Misstated Inventory ...

    http://www.investopedia.com/exam-guide/cfa-level-1/assets/misstated-inventory.asp
    ... 8.10 Effects of Inventory Accounting; 8.11 Causes a Decline in LIFO Reserve; 8.12 ...
    9.20 Types Of Off-Balance-Sheet Financing; 9.21 Effects Of Off-Balance Sheet ...

  • CFA Level 1 Study Guide - Assets - Effects of Inventory Accounting ...

    http://www.investopedia.com/exam-guide/cfa-level-1/assets/inventory-accounting.asp
    ... 8.10 Effects of Inventory Accounting; 8.11 Causes a Decline in LIFO Reserve; 8.12 ...
    9.20 Types Of Off-Balance-Sheet Financing; 9.21 Effects Of Off-Balance Sheet ...

  • CFA Level 1 Study Guide - Assets - Inventory Analysis ...

    http://www.investopedia.com/exam-guide/cfa-level-1/assets/inventory-analysis.asp
    ... 8.10 Effects of Inventory Accounting; 8.11 Causes a Decline in LIFO Reserve; 8.12 ...
    9.20 Types Of Off-Balance-Sheet Financing; 9.21 Effects Of Off-Balance Sheet ...

  • What Is A Cash Flow Statement?

    http://www.investopedia.com/articles/04/033104.asp
    ... If inventory was purchased on credit, an increase in accounts payable would occur ...
    Financing Changes in debt, loans or dividends are accounted for in cash from ...

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