Inventory Financing Agreements

An inventory financing agreement is a loan arrangement where a business borrows money using its inventory (like products or goods) as collateral. If the business can't repay the loan, the lender can take ownership of the inventory to recover their funds. This type of financing helps businesses access cash quickly to buy more stock, manage cash flow, or expand without selling existing inventory. Such agreements specify terms like the loan amount, interest rate, repayment schedule, and inventory valuation methods. It's a common way for companies to leverage their inventory assets for immediate financial needs.