Inventory financing is business funding secured by the goods a company buys to resell, repaid as that stock sells. Silvershore Funding Group, a small-business funding broker in Flagstaff, Arizona, explains advance levels, floor plan financing and lien filings, and connects Coconino County retailers and wholesalers with lending partners, who value the inventory, decide and set rates and terms.
| What it pays for | Stock bought for resale |
|---|---|
| Collateral | The inventory itself, usually recorded with a UCC filing |
| How it is repaid | As goods sell, on the partner's schedule |
| Floor plan | A per-unit version for serialized, high-value goods |
| Who decides | The lending partner, not Silvershore Funding Group |
| Office | 10 N Leroux St, Flagstaff, AZ 86001 · (928) 239-1321 |
How inventory financing works, step by step
- You identify the purchase. A supplier order, a pre-season buy, or stock for a new product line.
- The partner values the goods. It advances a portion of that value, not the full amount, because it has to be able to recover its money by selling the goods if the business cannot repay.
- The goods arrive and sell. The partner may ask for regular inventory reports while the financing is open.
- Repayment follows sales. Depending on the structure, you repay installments on a schedule or pay down the balance as units sell.
Because the inventory is the collateral, the partner cares more about the goods than many other lenders would: what they are, how fast they sell and what they would fetch if they had to be sold quickly.
Why the advance is less than the stock's cost
Partners value inventory at what it would bring in a forced sale, not at its retail price, and that gap depends on the goods. Durable, branded products that hold their value usually support a larger advance than perishable food, fashion items or custom stock that only one buyer wants. Slow-moving inventory also counts against a request, since it ties up the collateral longer.
If the advance would not cover enough of the purchase, a business line of credit or short-term working capital can fill the rest, though stacking several forms of financing on the same stock needs care.
Floor plan financing, in plain terms
Floor plan financing is inventory financing for high-value items that each carry a serial or vehicle identification number: vehicles, trailers, boats, large equipment and some appliances. The partner pays the manufacturer or distributor for each unit, and the dealer repays that unit's amount when it is sold.
Floor plans usually involve periodic checks in which the partner counts the units against its records, and many require partial payments on units that stay unsold past a set date. Those are worth reading closely, because they can turn slow-selling stock into a cash demand.
Inventory financing vs. factoring
The two are often confused. Inventory financing borrows against goods before they are sold. Factoring sells invoices after the goods or services have been delivered, in return for cash now, and the factor collects from your customer. A business that sells on account to other businesses might use both at different stages of the same sale. Factoring is not one of the six options Silvershore Funding Group helps with.
Collateral and the UCC filing
Partners almost always record their claim on financed inventory by filing a UCC financing statement. Some filings name specific goods; others cover all inventory, or all business assets. A blanket filing from an earlier lender can block a new inventory request until it is resolved, so check the public record first. Our guide to Arizona UCC records walks through searching and reading the filings against your business.
Retail and wholesale in Coconino County
Inventory-based businesses are a large part of the county economy. Coconino County had 550 retail employer establishments in 2023, employing 8,234 people and paying $296.3 million in annual payroll, plus 100 wholesale employer establishments (U.S. Census Bureau, County Business Patterns 2023). Retail stores here run somewhat larger than the county's typical employer: 37.8 percent had fewer than five employees, compared with 52.8 percent of all employer establishments (same source).
Smaller sellers count too. The county had 683 retail businesses and 178 wholesale businesses with no paid employees in 2024 (U.S. Census Bureau, Nonemployer Statistics 2024), a different program and year, so the two sets of figures should not be added together. More local data is on our Flagstaff page, and other sectors are under financing by industry.
Which financing for stock?
| Inventory financing | Line of credit | Working capital | |
|---|---|---|---|
| Collateral | The inventory | Varies; often a general lien or guarantee | Varies |
| Suited to | Large or planned stock purchases | Repeated reorders of varying size | A one-off purchase plus related costs |
| Repayment | As goods sell or on schedule | On the drawn balance | Fixed installments |
| Watch for | Reporting duties and unsold-unit payments | Renewal reviews | Total repayment cost |
Silvershore Funding Group is a broker, not a lender.How a request is handled explains what we do before a partner reviews it.
By Silvershore Funding Group · Updated