Inventory financing lets a business buy stock now and pay for it as the goods sell, with the inventory usually serving as collateral. Mesaside Advances, a small-business funding broker in Cheyenne, Wyoming, explains how it works, what a UCC filing means and how it compares with a credit line for Laramie County retailers and wholesalers. Lending partners decide and set terms.
| Pays for | Stock bought before it sells |
|---|---|
| Usually secured by | The inventory, recorded with a UCC financing statement |
| Paid back | As goods sell, or on a fixed schedule |
| Laramie County retail | 374 employer establishments in 2023 (Census CBP 2023) |
| Laramie County wholesale | 125 employer establishments in 2023 (same source) |
| Office | 1900 Thomes Ave, Cheyenne, WY 82001 · (307) 368-2257 |
How inventory financing works
A partner advances money to buy goods, often a share of their cost or wholesale value rather than the full amount, and takes a security interest in the inventory. As the goods sell, the business pays the funding down. Some arrangements are term loans with a fixed schedule; others work like a revolving line sized to the value of stock on hand, rising and falling as inventory moves.
Because the inventory is the collateral, partners care about what it is and how quickly it sells. Fast-moving goods with a clear resale value are easier to finance than specialized or perishable stock.
How to finance inventory: three common structures
- Inventory term loan. One amount for a specific purchase, paid back in installments.
- Inventory line of credit. A limit tied to the value of stock, drawn as you buy and paid down as you sell.
- Floor plan financing. Used for high-value items held individually, such as vehicles or large equipment for resale. Each unit is financed separately and paid off when that unit sells; partners check stock on hand at intervals.
Floor plan financing means each financed item is tracked by serial number or similar, which suits dealers more than general retail. Most shops and distributors use a line or a term loan.
Collateral and UCC filings
When inventory secures funding, the partner usually files a UCC financing statement with the state, a public notice that it has a claim on the stock. Other creditors can see it, and a later partner may be reluctant to lend against inventory that is already pledged. Ask what the filing covers (only the financed goods, or all business assets) and when it will be released once the funding is paid off.
Inventory financing, a line of credit or working capital?
| Inventory financing | General line of credit | Working capital loan | |
|---|---|---|---|
| Tied to | The stock being bought | The business overall | The business overall |
| Size set by | Value of the inventory | Revenue, credit and assets | Revenue, credit and the gap |
| Fits | Large or regular stock purchases | Mixed, recurring costs | One short-term gap |
If stock is only one of several recurring costs, a general business line of credit may be simpler. For a one-time gap, a working capital loan may do. A merchant cash advance is sometimes offered to shops with heavy card sales; it is not a loan, and its total cost needs comparing first. All six options are side by side on one page.
Retail and wholesale in Laramie County
Laramie County had 374 retail employer establishments and 125 wholesale employer establishments in 2023 (U.S. Census Bureau, County Business Patterns 2023). Retail is one of the county's larger employers by headcount, with 6,416 paid employees in the March 2023 pay period in the same source. The county also counted 807 retail businesses and 225 wholesale businesses with no paid employees in 2024 (U.S. Census Bureau, Nonemployer Statistics 2024), a separate count from a different program and year that should not be added to the employer figures.
Size varies widely. In 2023, 43.9 percent of the county's retail employers had fewer than five employees, against 56.0 percent of its wholesalers (County Business Patterns 2023). A one-person shop restocking for a busy month and a distributor carrying a warehouse of goods need different structures, which is why the first question is how the stock turns into cash. More on the local business mix is on the Cheyenne, WY page, and every sector we cover is on the industries page.
What partners usually review
- An inventory list or aging report: what you hold, what it cost and how long it has sat
- Sales history showing how fast stock turns
- Supplier invoices or purchase orders for the goods to be financed
- Recent business bank statements and financial statements
- Existing liens on business assets
Questions to ask before you sign
- What share of the inventory's cost or value will be advanced?
- How is the inventory valued, and how often is it checked?
- Is payment due as each item sells, on a schedule, or both?
- What does the UCC filing cover, and when is it released?
- What happens to slow-moving or obsolete stock?
Where Mesaside Advances fits
We help you decide whether inventory financing or a broader line suits your buying pattern and send the request to partners offering it. What happens after you call is set out step by step.
By Mesaside Advances · Updated
