What is Revenue-Based Financing? Here is Everything You Need to Know
This article discusses the fundamentals of revenue-based financing, covering important concepts, examples and frequently asked questions.
Inventory loan is a form of asset-based term loan in which a lender provides you with capital to purchase inventory.
While lenders usually require equipment or real estate assets as collateral for bank loans, an inventory loan is collateralized by the inventory you purchase. In other words, the creditor will seize and sell your inventory if you fail to repay.
Inventory loans are helpful for preparation of peak seasons, during which you need to make bulk purchases of goods that tie up a significant amount of capital.
However, this type of loan may not give you sufficient funds to support business growth, such as product launch or market expansion.
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This article discusses the fundamentals of revenue-based financing, covering important concepts, examples and frequently asked questions.
Bank loans and equity financing can support your business goals in different ways. Explore the difference to know what’s the right next step for you.