Money for goods meant for resale, paid down as they sell. Supplies a business uses up itself, and equipment, belong to other funding types.
At a glance
- Pays for
Goods bought to resell
- Paid down
As the stock sells
- Decision
Made by a funding partner
An inventory financing example: bottled water and soda pallets at a Klamath Falls, OR grocery store
Illustration only, invented figures: a grocery store orders an invented $14,635 of bottled water and soda by the pallet to get a supplier’s case price. Financed at an invented 13.27% annual rate, the store pays the partner back each month with the cost of what sold, plus that month’s interest on the balance still owed.
| Month | Stock sold, at cost | Paid to the partner | Balance left |
|---|---|---|---|
| Month 1 | $4,185 | $4,346.84 | $10,450 |
| Month 2 | $5,240 | $5,355.56 | $5,210 |
| Month 3 | $3,610 | $3,667.61 | $1,600 |
| Month 4 | $1,600.00 | $1,617.69 | $0 |
In this invented case the last $1,600.00 clears in month 4, and the invented interest across the four months comes to $352.70. If the cases sell more slowly, the balance stays out longer and the invented interest grows with it.
What counts as inventory at a Klamath County, OR motel, and what stays a supply
A motel holds two kinds of goods, and only one of them is inventory in the sense a funding partner means. Goods the motel sells to guests are stock. Goods the motel uses up while running the rooms are supplies, and working capital is the funding type that matches them.
- Stock for resale: snacks and drinks sold from the vending machines and the gift shop
- Stock for resale: toiletries, phone chargers and souvenirs sold at the front desk
- Supplies, not stock: soap, shampoo and coffee packets placed in the rooms
- Supplies, not stock: cleaning products and laundry detergent
- Not stock at all: vending machines, which are equipment
The split matters because resale stock can be counted and valued as it sells, while supplies disappear into the cost of each night. A working capital loan is the matching type for the supplies side.
Purchase order financing example: a Klamath County, OR restaurant-supply distributor with a confirmed smallwares order
Illustration only, invented figures: a restaurant-supply distributor wins an invented $31,190 order for pans, sheet trays and utensils from a care facility kitchen. Its own supplier wants an invented $22,470 up front. Under purchase order financing, a partner may pay that supplier directly, and the distributor settles once its customer pays.
Suppose the invented fee is 3.15% of the supplier cost for each 30 days, and the customer pays on day 45, so two periods are charged: an invented $1,415.61. The invented gross margin of $8,720 shrinks to $7,304.39.
A partner may ask for the signed customer order and may look at the customer’s payment record before it pays the supplier. Wholesale trade counted 52 employer establishments in Klamath County, OR in 2023, employing 517 people (County Business Patterns).
How inventory financing runs, step by step, for camping gear at a Klamath Falls, OR sporting goods store
- List the order: tents, sleeping bags, camp stoves and coolers, with the supplier invoice total
- Show past sales of the same lines, so a partner can judge how long the stock sits
- Call Fairgrove or send the request, then go over the order total and the store’s figures by phone
- A funding partner reviews the order, the store’s statements and possibly the owner’s credit
- If an offer comes, read the advance share, rate, fees and how paydowns are timed
- Once signed, the supplier is paid and the store pays down as the gear sells
Gear that sells over several months fits better than goods that may sit unsold for a year. ZIP 97601 counted 76 retail employer establishments in 2023, 47.4% of them with under five employees (ZIP Code Business Patterns). ZIP 97601, which includes Fairgrove’s office in Klamath Falls, OR, reported $412.7 million in employer payroll for 2023 (ZIP Code Business Patterns); the city page pairs it with the paid-employee count.
Inventory financing companies Klamath Falls, OR store owners compare: two invented offers on furniture floor stock
Illustration only, invented figures: a furniture store wants to stock an invented $36,850 of sofas, recliners and dining sets. Two invented offers fund different shares of that cost, which changes both the monthly interest and the cash the owner must put in.
| Point | Offer A | Offer B |
|---|---|---|
| Share of stock cost funded | 65% | 80% |
| Amount funded | $23,952.50 | $29,480 |
| Rate (annual %) | 12.43% | 15.91% |
| First month’s interest | $248.11 | $390.86 |
| Owner’s own cash toward the stock | $12,897.50 | $7,370 |
In this invented comparison, offer B needs $5,527.50 less from the owner but costs $142.75 more in the first month’s invented interest. The right pick depends on how much cash the store can spare, and how soon the floor stock turns over.
By Fairgrove Funding Group · Updated