Inventory Financing 101: Turning Supplier Payments Into Growth

For ecommerce businesses, inventory is often the largest asset on the balance sheet — and the least liquid. Inventory-based financing helps merchants unlock cash tied up in stock without selling at a discount.

What Is Inventory Financing?

Inventory financing is a type of asset-based lending where existing inventory serves as collateral for a loan or credit facility. Unlike purchase order financing (which funds new inventory purchases), inventory financing provides liquidity against stock you already own.

How It Works with RiseFi

1. Inventory Verification — RiseFi connects to your WMS or 3PL to verify inventory levels and valuations at the SKU level
2. Valuation — Each SKU is valued based on sales velocity, market demand, and liquidation value
3. Funding — Merchants receive capital based on a loan-to-value ratio (typically 60-80% of inventory value)
4. Monitoring — Real-time inventory tracking ensures collateral coverage is maintained

Who Benefits?

Ecommerce Brands

• Access capital without diluting equity
• Fund marketing campaigns or new product launches
• Bridge seasonal cash flow gaps

3PL Operators

• Offer financing as a value-add service
• Deepen merchant relationships
• Earn revenue share on funded merchants

Warehouse Owners

• Leverage your inventory visibility data
• Create new revenue streams
• Reduce merchant churn

Key Metrics

• Loan-to-Value (LTV): 60-80% of appraised inventory value
• Valuation Method: SKU-level, real-time monitoring
• Funding Speed: Typically 2-5 business days after verification
• Eligible Inventory: Finished goods in verified warehouse locations

Getting Started

If you're a platform or 3PL with inventory visibility, RiseFi can help you turn that data into a financing advantage. Contact our partnerships team to learn more.