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An inventory loan is money you borrow to purchase inventory for your business. These reputable lenders offer quick funding and relaxed borrowing requirements so you can replenish your inventory in no time.
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An inventory loan is money you borrow to purchase items your business will sell. In the case of inventory financing, the inventory you are purchasing is used as collateral to secure the loan. However, you can also use other types of business loans to buy inventory, including unsecured short-term loans and lines of credit.
Whether you need an inventory loan for seasonal business financing or to take advantage of a wholesale bargain, it can be a smart business decision to take out a loan to purchase inventory. Start your search for inventory financing with our picks for the best small business inventory loans.
Learn More About Our Top Picks
| Company | Summary | Next StepsSummary |
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BusinessLoans.com
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Revenued
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Bluevine
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OnDeck
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LoanBuilder
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Lendio
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Read more below to learn why we chose these options.
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The following are some of the best inventory loans and lines of credit for small businesses. These reputable lenders offer quick financing with shorter terms and smaller borrowing amounts, generally starting at around $5,000 — but in some cases offering as much as $500,000 or more. Our top picks include:
| Funding Type | Max Borrowing Amount | APR | FICO | |
|---|---|---|---|---|
| BusinessLoans.com | Term loans, MCAs, LOCs, STLs | $3 million | Undisclosed | N/A |
| Revenued | Business credit cards, Flex Lines | $750,000 | Factor rates starting at 1.1 | N/A |
| Bluevine | Lines of credit, term loans | $250,000 | Starts at 7.8% | 625 |
| OnDeck | Term loans, lines of credit | $250,000 | Starts at 29.9% | 625 |
| LoanBuilder | Short-term loans | $150,000 | Starts at 2.9% | Undisclosed |
| Lendio | SBA loans, STLs, LOCs, term loans | Varies by lender/product | Varies by lender/product | N/A |
Pros
Cons
BusinessLoans.com is an online lending marketplace that small businesses can use to apply for business financing. Some options offered by BusinessLoans.com partners work well as inventory loans, including short-term loans, lines of credit, and merchant cash advances.
Using this marketplace, you can submit one quick application and receive multiple financing offers. This way, you can comparison shop to choose the best offer to finance your inventory purchase.
Get Started With BusinessLoans.com
Pros
Cons
Revenued is a financing option if you need capital to buy inventory but don’t want your credit checked. This fintech lender offers a no-credit-check business credit card and Flex Lines, a flexible spending line tied to your revenue. Businesses that have been in operation for at least 1 year and have $20,000+ monthly cash flow may qualify.
Your credit line grows automatically in line with your business revenue, making Revenued a good option for a business with high sales volume that needs regular access to cash or credit to purchase inventory (or pay other business expenses). It’s also a suitable form of inventory financing for businesses with bad credit.
Pros
Cons
Bluevine is another high-quality online lender offering revolving lines of credit up to $250,000. Bluevine is unparalleled in its convenience and flexibility, and you can potentially qualify and start withdrawing funds within minutes. Once your draw is approved, the funds will hit your bank account within a few hours (if you pay $15 for a bank wire) up to a couple of days. To withdraw more money, simply request funds using the web portal.
Business lines of credit such as Bluevine provide flexible financing for established businesses that experience seasonal revenue fluctuations or want to take advantage of inventory sales as opportunities arise. And if you would prefer a term loan, Bluevine offers those up to $250,000.
Pros
Cons
One of the most popular online lenders for small businesses, OnDeck is hard to beat for fast, short-term inventory loans. OnDeck offers both short-term loans and lines of credit, though you can only borrow up to $100,000 with the LOC (term loans can be as large as $250,000). OnDeck has no prepayment penalty on LOCs as well as loyalty benefits for returning customers (it’ll waive all remaining interest on your current loan if you apply for a new one, i.e., no double-dipping).
OnDeck’s short term lengths combined with its same-day funding option make these loans perfect for buying quick-turnaround inventory at a discount. And with LOC withdrawals up to $10K, OnDeck offers instant funding, which puts the money in your account within seconds of withdrawing, even on nights and weekends.
Pros
Cons
LoanBuilder is an online loan service owned by PayPal (not to be confused with PayPal Working Capital loans, which are available to PayPal sellers only). LoanBuilder offers short-term loans up to $150,000 (although first-time borrowers can only borrow up to $100,000).
LoanBuilder is easy to qualify for, and these loans are also easy to renew once you pay off your current loan. You can also receive funding quickly -- as soon as the next business day after approval.
Pros
Cons
Lendio is an online lending marketplace that matches prospective borrowers with a loan that meets their needs, at no charge to the borrower. As such, it can be a very convenient place to search and apply for an inventory loan online, whether you’re looking for a short-term loan, line of credit, merchant cash advance, or even a bank or SBA loan.
Lendio is a convenient way to apply for SBA loans up to $5 million. These loans boast competitive rates and long repayment terms. For inventory financing, a microloan up to $50,000 is a great choice. Unlike other lenders, Lendio simplifies the SBA loan application process; the initial application for an SBA loan through Lendio should only take about 15 minutes.
We spend hours researching and evaluating each business loan and funding product that we review at Merchant Maverick, placing special emphasis on key characteristics to generate our ratings.
When rating lenders and funding providers, we use a 31-point rubric that looks at rates and fees, services, eligibility requirements, application, sales and advertising transparency, customer service, and user reviews. We weigh each section differently to calculate the total star rating. This rubric is applied to traditional term loans, as well as short-term loans, start-up loans, lines of credit, online lending products, merchant cash advances, and equipment financing products.
Each section is further broken down into granular, weighted subsections, in which we examine specific attributes like terms lengths, conditions of repayment, credit score and revenue requirements, ease of application, length of time to funding, the ethics involved in promoting the lending product, customer support, and the overall reputation of the lender or funding provider.
Read more about how we rate small business lenders.
If you need a loan to purchase inventory, it’s tempting to quickly accept a loan so you can restock ASAP. However, you should look for a few key things before signing a loan contract.
It’s possible you won’t need a loan with all of these qualities, but generally, small businesses should choose inventory financing lenders with the following characteristics:
SBA loans for inventory generally have the advantage of a lower APR when compared to alternative/online lenders and are offered in larger amounts, up to several million dollars.
Although most businesses looking for an inventory loan will be best served by a short-term financing product such as an STL or LOC — which are almost exclusively offered by alternative lenders — you might try applying for an SBA loan if you have an established business (2-3 years) and can wait a little longer for the money to come through.
One appropriate type of SBA loan for purchasing inventory is an SBA microloan. These are smaller loans offered up to $50K. Another is a Seasonal CAPline, a type of SBA 7(a) loan solely for financing seasonal increases of accounts receivable and inventory.
Compared to a standard business loan, inventory financing is more expensive but is usually easier to obtain, as long as you have a larger, established business and your inventory is selling quickly. You do not necessarily need to have good credit, but you will need to demonstrate a strong sales record that indicates you will be able to easily sell the inventory you are purchasing.
Don’t forget that you also don’t have to specifically use an inventory financing loan. Small business loans and lines of credit — like those listed in this article — can also be used to purchase inventory.
Take the time to educate yourself about inventory financing and compare your options before committing to a loan. If you don’t find a match on this list, check out our other picks for the best small business loans for more great funding options.
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Merchant Maverick’s ratings are editorial in nature, and are not aggregated from user reviews. Each staff reviewer at Merchant Maverick is a subject matter expert with experience researching, testing, and evaluating small business software and services. The rating of this company or service is based on the author’s expert opinion and analysis of the product, and assessed and seconded by another subject matter expert on staff before publication. Merchant Maverick’s ratings are not influenced by affiliate partnerships.
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