Inventory Financing

Inventory financing in the form of a commercial line of credit is the most common medium used by entrepreneurs. By choosing a line of credit, you will give yourself the means to improve the management of your liquidity and to take advantage of short-term financing and the opportunities that present themselves to your organization. The line of credit is a very suitable tool for financing inventory, working capital and accounts receivable.

Your mortgage broker can offer you flexible financing solutions tailored to your needs depending on the particulars of your business and its business cycle. His expertise will allow him to quickly obtain a tailor-made financing offer for you.

Inventory Financing

In general, it is possible to obtain funding:

  • Varying between 35% and 65% of the cost of your inventories
  • Reaching 35% of the value of your work in progress

The bank will, however, make certain exclusions from this calculation, including:

  • The amount of accounts payable linked to unpaid purchases of less than 30 days
  • The amount of unpaid government remittances

To achieve the best financing terms, your business must demonstrate excellent financial results. The documentation required in this type of funding request will be:

  • Financial statements for the past three years
  • The most recent interim financial statements
  • Financial forecasts and cash budget
  • List of inventories and work in progress
  • The amount of unpaid government remittances
  • Personal balance sheet of the shareholders

Financial institutions will generally monitor your results on a regular basis to establish the authorized limit of your line of credit.

You should expect to incur file opening fees, annual review fees, and follow-up fees.



Your mortgage broker

Your mortgage broker will be your ally in order to obtain:

  • The highest percentage of financing to reduce your down payment
  • The longest amortization to reduce the impact on your cash-flow
  • The lowest possible application fees
  • Negotiating the best financing conditions on the market