Baydale arranges it through funding partners, who review each request and set any terms; the stock itself can secure the loan.
A short loan for stock a business will resell, paid down as the goods sell. The examples cover a supplier’s confirmed order, a hardware store, two offers compared, an optometry office’s frames and a restaurant’s wine list. Partners set any terms.
At a glance
- Pays for
Goods bought to resell
- Paid back
As the stock sells, over a few months
- Example terms on this page
4 to 6 months, all invented
A confirmed customer order, stocked before it ships: a Shelby County, TN medical supply wholesaler
Some suppliers receive a customer’s order before they hold the goods to fill it. Inventory financing can pay the supplier’s own vendor so the order ships, and the loan is paid down once the customer settles the invoice.
Illustration only, invented figures: a medical supply wholesaler accepts an order from a clinic group and needs $36,400 to buy gloves, gowns and exam-table paper from its own vendor. Spread across 4 invented months at a 12.35% annual rate, the order costs $9,335.33 a month in this invented case, or $37,341.32 once all four invented payments are made.
The first invented payment falls due before the clinic group pays on its 30-day terms, so in this invented plan the wholesaler covers that one from cash on hand and the rest from collected invoices.
Shelby County, TN was home to 1,109 wholesale trade establishments with paid staff in 2023 (County Business Patterns). In a separate count, ZIP Code Business Patterns listed 64 wholesale trade establishments with a ZIP 38017 address that year.
The goods as collateral: how an inventory loan is drawn and paid down at a Collierville, TN hardware store
With inventory financing, the goods bought are part of the security. A funding partner may record a lien on the stock it pays for, and the business pays the loan down from the money those goods bring in. The path looks like this:
- The store prices the order with its vendor and calls Baydale with the amount and what it covers.
- A funding partner reviews the funding request and may ask for recent sales figures or bank statements.
- Any offer names the amount, the annual rate, the term, any fees and whether a lien goes on the stock.
- After signing, the partner pays the vendor or the store, as the agreement sets out.
- The store makes its scheduled payments while the goods sell.
Illustration only, invented figures: a Collierville, TN hardware store stocks a $19,750 order of power tools, fasteners and paint ahead of a contractor’s large job, financed over 6 months at an 11.65% annual rate. The invented payment is $3,404.42, and the six invented payments total $20,426.52, including $676.52 of interest.
In Shelby County, TN, 44.7% of the 2,910 retail trade establishments counted in 2023 County Business Patterns had fewer than five employees.
Two offers for one stock order: what a Collierville, TN pet supply store weighs side by side
Inventory offers differ in rate, term and fees. A lower rate spread over more months can still cost more interest, so the totals say more than the rate does.
| Offer | Annual rate | Months | Monthly payment | Total paid | Interest |
|---|---|---|---|---|---|
| A | 12.45% | 6 | $2,453.35 | $14,720.10 | $520.10 |
| B | 13.6% | 4 | $3,651.15 | $14,604.60 | $404.60 |
In this invented pair, offer A carries the lower annual rate but costs $115.50 more in interest because it runs two months longer, while offer B asks for $1,197.80 more each month. A store whose invented stock turns in about four months may find that offer B’s schedule tracks its sales; one that sells through more gradually may prefer A.
Any documentation or lien-filing fee named in an offer gets added to that offer’s interest before the two are set against each other.
Frames on the wall, paid down as they sell: a month-by-month inventory example for a Collierville, TN optometry office
Some inventory financing is paid down as the stock sells rather than on a level schedule. Each sale lowers the balance, and interest runs only on what is still owed.
| Month | Opening balance | Paid down from sales | Interest | Closing balance |
|---|---|---|---|---|
| Month 1 | $11,900 | $2,600 | $130.57 | $9,300 |
| Month 2 | $9,300 | $3,100 | $102.05 | $6,200 |
| Month 3 | $6,200 | $2,900 | $68.03 | $3,300 |
| Month 4 | $3,300 | $3,300 | $36.21 | $0 |
Across these four invented months the office pays $336.86 of invented interest, and the frame order is paid off with the fourth month’s invented sales.
Optometrists sit inside NAICS 6213, offices of other health practitioners; 29 such offices had ZIP 38017 addresses in 2023, per ZIP Code Business Patterns.
Cases of wine for the list: when stock financing fits a Collierville, TN sit-down restaurant
When a restaurant’s food is used within days of delivery, a loan for food stock alone does little for it. Wine is different: cases bought for a list can sit for months before the last bottle is poured.
Illustration only, invented figures: a Collierville, TN sit-down restaurant buys $8,450 of wine to fill out its list, financed over 5 months at a 13.05% annual rate. The invented payment is $1,745.53, and the five invented payments total $8,727.65, of which $277.65 is interest.
Whether a funding partner finances alcohol stock is that partner’s call, and some may not. Food and staff costs ahead of a catered event are a working capital question instead.
Most Shelby County, TN dining rooms are not tiny operations: only 22.6% of the county’s 625 full-service restaurants had fewer than five employees in 2023 County Business Patterns (NAICS 722511).
By Baydale Funding Group · Updated
