Definition - What does Inventory Financing mean?
Inventory financing can be referred to as a line of credit or loan for a business. It is secured by the business’s own inventory. The inventory acts as a collateral against the loan. This type of financing is particularly useful for businesses with large amount of inventory.
Justipedia explains Inventory Financing
Inventory financing is a great solution for temporary cash problems due to large amount of inventory ready but not yet sold. Inventory financing should always be taken and used as a short-term financing tool.