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Best business loans for inventory in 2026
The best financing for inventory is a business line of credit, because you buy stock, sell it, and buy again, and a line follows that cycle. Larger product businesses can borrow against the inventory itself with an asset-based line, and purchase order financing covers stock for a confirmed customer order. Match the repayment period to how long the inventory takes to sell.
By the WithFunded team · Published November 11, 2026 · Rates as of November 2026
The short list
- Best overall for repeat purchases
- Business line of credit
- Best for large inventory positions
- Asset-based line of credit
- Best for stock tied to a confirmed order
- Purchase order financing
- Best for a one-time bulk buy
- Online term loan
- Best when a supplier deadline is days away
- Working capital advance
The 5 best options, ranked
1. Business line of credit Best overall for repeat purchases
Draw to pay the supplier, repay as the goods sell, and draw again for the next order. Interest runs only while the stock is on the shelf.
Watch for: Some lenders add draw or maintenance fees, and a limit can be cut at renewal. Business line of credit guide →
2. Asset-based line of credit Best for large inventory positions
When inventory is a major asset, a lender will advance against it and against receivables. The limit rises with the amount you carry.
Watch for: Expect regular reporting on receivables and inventory, and a limit that moves with them. Business line of credit guide →
3. Purchase order financing Best for stock tied to a confirmed order
The funder pays your supplier for goods a customer has already ordered. You do not need the cash or the credit line to say yes to the order.
Watch for: Built for physical goods you resell. It does not fund services or labor.
4. Online term loan Best for a one-time bulk buy
A large discounted purchase or a first production run is a single event. A fixed loan with a term near your sell-through period fits it.
Watch for: A longer term lowers the payment but raises the total interest you pay. Term loan guide →
5. Working capital advance Best when a supplier deadline is days away
An advance funds fast enough to catch a supplier's deadline or a restock before a busy weekend. It should be used only on inventory that sells quickly.
Watch for: The most expensive option on this list, and daily or weekly remittance strains thin margins. Working capital guide →
Side-by-side comparison
| Option | Verdict | Cost basis | Funding speed | Qualifies on |
|---|---|---|---|---|
| Business line of credit | Best overall for repeat purchases | Representative 8%–30% APR, charged only on what you draw | Often days | Revenue, time in business, and credit |
| Asset-based line of credit | Best for large inventory positions | Interest on what you draw; the limit follows a borrowing base of receivables and inventory | Weeks to set up | The quality of your receivables and inventory |
| Purchase order financing | Best for stock tied to a confirmed order | A fee on the supplier cost, charged until your customer pays | Days to weeks | A confirmed purchase order from a creditworthy customer |
| Online term loan | Best for a one-time bulk buy | Representative 8%–30% APR, fixed payments over 6 to 60 months | Days | Revenue, time in business, and credit |
| Working capital advance | Best when a supplier deadline is days away | Often a factor rate rather than an APR; compare total payback | As fast as 24 to 48 hours | Recent revenue and cash flow more than credit score |
What it costs
A line of credit charges interest only on the balance you have drawn. This is the monthly interest on a carried draw, before any principal is repaid:
| Carried draw | At 8% APR | At 19% APR | At 30% APR |
|---|---|---|---|
| $25,000 | $167 | $396 | $625 |
| $75,000 | $500 | $1,188 | $1,875 |
| $200,000 | $1,333 | $3,167 | $5,000 |
Interest-only illustration across the representative band. Draw fees and repayment schedules vary by lender. WithFunded calculation.
Monthly payments on a standard fixed-payment loan at the representative 8%–30% APR band. The low end of each range is 8% APR and the high end is 30% APR.
| Amount | 6 mo | 12 mo | 24 mo |
|---|---|---|---|
| $25,000 | $4,264–$4,539 | $2,175–$2,437 | $1,131–$1,398 |
| $75,000 | $12,793–$13,616 | $6,524–$7,312 | $3,392–$4,193 |
| $150,000 | $25,587–$27,232 | $13,048–$14,623 | $6,784–$8,387 |
Financing $75,000 over 12 months costs about $6,524–$7,312 a month, or $3,290 to $12,738 in total interest, depending on the rate you qualify for. WithFunded calculation, representative 8%–30% APR band. Not a quote.
What lenders look at
- Inventory turnover: how many days stock sits before it sells.
- Gross margin, which has to cover the financing cost with room to spare.
- Sales history for the products being bought, especially for seasonal items.
Mistakes to avoid
- Financing inventory on a term shorter than it takes to sell.
- Using borrowed money to bet on an untested product in volume.
Frequently asked questions
- What is inventory financing?
- Financing used to buy stock, repaid as the stock sells. It can be a line of credit, a term loan, an asset-based line secured by the inventory, or purchase order financing.
- Can I use inventory as collateral?
- Yes, with an asset-based line. Lenders advance a percentage of the inventory's value and discount slow-moving or perishable goods.
- How much does it cost to finance $75,000 of inventory?
- On a line of credit at the middle of the representative band, about $1,188 a month in interest while the full amount is drawn. Repaying as goods sell lowers that.
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How we ranked these options
This guide ranks types of financing, not individual lenders. Each option is ordered by how well it fits the need described on this page, judged on four things in this order: whether the structure matches how the money will be used and repaid, total cost, funding speed, and how hard it is to qualify. Cost figures are WithFunded calculations from published rate inputs as of November 2026: the bank prime loan rate from the Federal Reserve, the SBA maximum-rate schedule, and Federal Reserve survey data. The method follows our 2026 SMB Financing Cost Report, whose own figures use June 2026 rates.
WithFunded is a financing marketplace, not a lender. Our 2-minute form suggests a product type from the families we cover, and a funding partner reviews the request. Not every structure named in this guide is available through WithFunded: options such as SBA microloans, USDA farm loans, bank loans, and seller financing are ones you would pursue directly with the provider. They are listed because leaving out a good fit would make the ranking less useful.
Related guides
The top-ranked option on this page is business line of credit because it fits the most common version of this need. Your own best fit depends on your revenue, time in business, credit, and how fast you need the money.
Disclaimer. WithFunded and Big Think Capital are a financing marketplace; we are not the direct lender and do not guarantee funding, approval, rates, or terms. Everything on this page is a representative example only — not an offer or a commitment to lend, and not financial advice. Actual rates, fees, payments, and terms are set by the funding lender and depend on your business, credit, and the product. Where required by state law, the lender provides cost-of-financing disclosures before any agreement is signed.