Ecommerce inventory financing can help you buy stock before sales turn into cash. Compare stock-backed funding if you own goods a funder accepts as security. For a smaller gap, Fundo offers $500 to $10,000 in revenue-based funding, subject to review. Its starting checks include $1,500 in average monthly revenue and three months in business. Weigh the full cost against your margins and the dates cash will reach your bank.
Your best-selling item is running low. Your supplier wants payment, but the next payout has not arrived. Before placing a bigger order, work out how much stock you need and what you can afford to fund.
For a wider look at funding routes, read How Can Amazon Sellers Get Business Funding?
How much cash does your next stock order need?
Start with the full cost to get the goods ready to sell. Include stock, freight, duties, and prep fees where they apply. Then subtract cash you can use after setting aside money for bills and a buffer.
Here is a made-up example, not a Fundo offer:
| Restock cost | Amount |
|---|---|
| 100 units at $20 each | $2,000 |
| Freight and prep | $200 |
| Total order cost | $2,200 |
| Cash available after bills and a buffer | −$600 |
| Funding gap | $1,600 |
Next, check the margin. Assume all 100 units sell for $40 each. Stock and freight cost $22 per unit. Allow another $12 for sales fees, delivery, ads, and returns. That leaves $6 per unit, or $600, before funding costs, fixed business costs, and taxes.
If all financing charges totaled $250, only $350 would remain for those fixed costs and taxes. That is why the size of the sales total alone cannot tell you whether funding makes sense.
Base the order on normal sales. A bulk discount can lose its value if the extra stock sits for months.
Which funding method fits the stock order?
When you compare stock funding, check what stands behind the deal. Using cash to buy goods does not mean those goods are pledged as security.
| What to compare | Inventory-backed funding | Fundo revenue-based financing |
|---|---|---|
| What supports the review? | The value of accepted stock, plus business checks. | Business revenue, bank activity, and cash flow. |
| How does it work? | You pledge stock as security under the terms. | Fundo buys future business sales receipts. |
| What costs should you check? | Rates, fees, and charges to value or check stock. | Net cash received, future receipts sold, and all fees. |
| What happens if sales slow? | Stock values and available credit may fall. | Ask how to request a payment adjustment. Do not assume bank debits change on their own. |
The OCC’s guide to asset-based funding explains how banks value stock used as security. Your shop’s price tag does not set the amount you can get. Old goods may be left out. You may also need to send stock counts and reports.
There is also an asset risk. The SBA’s explanation of asset-based funding notes that pledged assets can be taken and sold after default. Review that risk alongside the price.
Before choosing either route, ask your supplier about a smaller order, split deliveries, or extra time to pay. Get any terms in writing. Check whether a lost cash discount or added fee changes the savings.
Will cash arrive before the first payment is due?
Map four dates: when you pay the supplier, when stock arrives, when it should sell, and when the proceeds should reach your bank.
For example, Amazon’s payout guide explains that fees, refunds, and funds held back affect what you receive. Bank transfers take time, too. A sale on your dashboard is not yet cash you can spend.
Now compare those dates with the funding terms. If collections start before the new stock sells, which existing cash will cover them? Test a slower sales week and a delayed shipment, too.
What does Fundo check for inventory funding?
Fundo’s funds can cover business costs such as stock. You sell an agreed amount of future business sales receipts for cash now. The amount sold differs from the cash that reaches your bank.
Fundo checks. your bank deposits, cash flow, and other bills still matter.
Read Fundo’s funding rules. Ask whether your bank and payout frequency meet its current deposit rules. Have the supplier’s quote and your cash gap ready. Fundo’s online process checks your bank records with an approved service such as Plaid.
Questions sellers ask before restocking
Can a brand-new business qualify with no sales yet?
A business with no sales would not meet Fundo’s starting rules. You need at least three months in business and $1,500 in average monthly revenue. A small test order may help you learn what sells before you seek funds.
Can stock at a third-party warehouse count as collateral?
Ask the funder first. Where is the stock kept? Who owns it? Can the funder inspect it? These details can affect which goods count as security.
Put a funding plan behind your next restock
Know what sells, what the full order costs, and when cash should return. Then take the next step with a clear amount in mind.
Apply with Fundo to fund your next stock order. Share your business details so Fundo can review your sales and bank activity. All funding is subject to review and approval.
Sources
Disclaimer:
Fundo offers Revenue Based Financing programs exclusively for business use. Any references to loan products, consumer products, or other financing forms are solely for marketing and educational purposes, aiming to differentiate Fundo's product from other similar financing options in the market.
