Inventory financing is business funding used to purchase stock, typically secured by that inventory and repaid as the goods sell. Oakwick Lending Group, a small-business funding broker in Concord, NC, helps Cabarrus County retailers and wholesalers understand collateral, UCC filings and repayment, and introduces requests to lending partners, which make the credit decision and set rates and terms.
| Designed for | Buying stock ahead of sales, for retail, wholesale and distribution |
|---|---|
| Security | Normally the stock being financed, noted in a UCC financing statement |
| How it comes back | Installments, or paydown as each financed item sells |
| Not the same as | Factoring, which advances against invoices already issued |
| Cabarrus County context | 754 retail and 245 wholesale employer establishments (Census CBP 2023) |
| Who decides | A lending partner; Oakwick Lending Group only arranges |
| Address | 4 Union St S, Concord, NC 28025 · (980) 352-5260 |
How inventory financing works
A partner advances money to buy goods, or pays the supplier directly, and takes a security interest in the inventory. You sell the stock in the normal course of business and repay either on a fixed schedule or item by item as sales happen. Partners rarely lend the full cost of the goods; they apply an advance rate that reflects how easily the stock could be resold if the business could not repay.
That last point drives everything. Fast-moving goods with a clear resale market are easier to finance than custom, perishable or seasonal items. Expect the partner to ask how quickly your stock turns and how much of it is older than a few months.
The UCC filing that comes with it
Because the inventory secures the debt, the partner will normally file a UCC-1 financing statement with the North Carolina Secretary of State. The filing is public and tells other creditors that the partner has a claim on the described collateral. It can affect later borrowing, since a second lender may not want to take a junior position on the same goods.
Ask exactly what the filing will describe. A filing limited to the financed inventory is narrower than a blanket lien on all business assets, and the difference matters when you next need a credit line or an equipment loan.
Common structures
- Inventory term loan: a lump sum for a defined purchase, repaid in installments whether or not the stock has sold.
- Inventory line of credit: a revolving limit tied to the value of eligible stock, which rises and falls as inventory is bought and sold.
- Floor plan financing: a line used by dealers of high-value serialized goods, where each unit is financed individually and paid off when that unit is sold. Partners audit the floor periodically to confirm every financed unit is still on hand or has been paid for.
- Purchase order financing: funding to pay a supplier for goods already ordered by a customer, repaid when the customer pays.
Which structure fits depends on how predictable your sales are and whether the goods can be tracked unit by unit.
Inventory financing, factoring and working capital
| Inventory financing | Invoice factoring | Working capital loan | |
|---|---|---|---|
| Secured by | Goods on hand | Invoices already issued | Often unsecured, with a guarantee |
| Timing | Before the sale | After the sale, before payment | Any time |
| Repaid from | Sales of the financed stock | The customer's payment of the invoice | General revenue |
Factoring is not a loan against stock; it is a sale or pledge of receivables. If your shortfall comes from customers who pay slowly rather than from buying goods, the inventory structures above are the wrong tool. The six-way comparison shows where each fits.
Cabarrus County, NC retailers and wholesalers
Retail trade had more employer establishments than any other sector in Cabarrus County in 2023: 754, with 13,420 paid employees. Only 36.3 percent of those retail establishments had fewer than five employees, a smaller share than the county-wide 54.1 percent. Wholesale trade added 245 employer establishments, 52.7 percent of them with fewer than five employees (U.S. Census Bureau, County Business Patterns 2023).
A further 1,544 retail businesses in the county operated with no paid employees in 2024 (U.S. Census Bureau, Nonemployer Statistics 2024). These come from a different program and year than the employer counts, so the two should not be added together. Both groups buy stock before it sells. The Cabarrus County business profile has the wider sector mix, and financing by sector covers construction, restaurants and medical practices.
What partners usually look at
- An inventory report: what you hold, what it cost and how old it is
- Sales history and gross margin by product line, if you track it
- Bank statements and tax returns for the business
- Supplier invoices or purchase orders for the stock to be financed
- Existing liens, found by a UCC search, and other debt payments
Keeping a clean, dated inventory count is the single most useful thing a retailer can do before applying. Partners discount stock they cannot verify.
Before you commit
Work out how much margin the financed goods leave after the cost of financing them, and how long they will take to sell. Financing stock that sits for six months can erase the profit on it. If sales are uncertain, a smaller first order costs less than a larger one financed at the same terms. How a request moves explains what we do before anything goes to a partner.
By Oakwick Lending Group · Updated