Each request is read by a funding partner, and that partner names the terms.
Stock bought on financing is paid down as it sells. The page separates purchase order financing from inventory financing, works an invented bar stock order in installments, and lists questions for comparing funding companies.
At a glance
- Pays for
Stock to sell or build with: siding, trim, bar stock, parts
- Security
The stock itself, at the partner's discretion
- Payments
Installments under the offer's terms
Purchase order financing or inventory financing for a Watertown, SD fabricator's round bar
The two are easy to mix up because both pay a supplier before the business is paid. Purchase order financing is tied to one customer order: a funder pays the supplier for the material that order needs, and the customer's payment settles it. Inventory financing is broader. It pays for stock the business keeps on hand and draws from for many jobs.
Picture a fabricator with a signed order for handrail brackets. If the round bar is bought only for that order, the funding follows the order. If the shop buys a rack of round bar and flat stock to cut from over the next several months, that is inventory, and installments run on their own schedule rather than on one customer's payment. Whether a fabricator or a hardware store should lease its next machine or buy it is the subject of a lease-or-buy post.
Requests through Whitespring Funding Group are reviewed by funding partners as inventory financing or working capital; a partner decides which, if either, fits.
How inventory financing works for a Codington County, SD building supply store's siding and trim
- The store picks the order: siding, trim boards, soffit and fasteners from its supplier.
- It gets the supplier's quote or invoice and keeps it ready for the request.
- A funding partner reviews the store's records and may make an offer with an amount, rate, term and any fees.
- If the store accepts, the partner pays the supplier or funds the store, depending on the offer.
- The store sells the stock to builders and walk-in customers and pays the installments as they come due.
The stock is the store's own: material on its shelves for sale. Financing pays for those shelves, not for work on a customer's house. For a hardware and building supply counter, the building supply stock post sets a four-month term beside a six-month one for an insulation truckload.
Retail is the largest sector by count in Codington County, SD: 189 of the 1,210 employer establishments in 2023 were retail trade (CBP), and 43.9% of those retail establishments had fewer than five employees. Building supply dealers are one of seven trades in a 2023 table on the Watertown, SD page.
Choosing among inventory financing companies: questions for a Codington County, SD auto repair shop's parts shelf
Banks, credit unions, specialty finance companies and supplier programs all fund stock, each in its own way. An auto repair shop that keeps filters, belts, wiper blades and fluids on hand can line offers up against the same questions:
- Does the funder pay the supplier directly or send the money to the shop?
- Is the stock the only security, or is there a general lien on business assets?
- What is the annual rate, and what fees are charged at funding or each month?
- How long is the term, and does it match how long the parts sit before they are used on a repair?
- Is there a cost for paying early?
In Codington County, SD, 33 auto repair and maintenance establishments had paid employees in 2023 (CBP), and 14 of them had fewer than five. For a shop that size, fees can matter as much as the rate, so put both on the comparison.
Inventory financing example: a Codington County, SD fabricator stocking bar stock and round tube
In this invented example, a fabricator buys $41,935 of bar stock, round tube and sheet in one order to get its supplier's price on a full load. Priced at an invented 12.68% a year and spread over 7 months, the order means an invented installment of $6,246.58.
All 7 invented installments come to $43,726.06, which is $1,791.06 of interest on the invented order. Before taking an offer like this, the shop checks whether the steel will be cut into finished work and paid for within those months. If the stock sits longer than the term, installments come out of other cash. Steel plate for a fabricator's order paid after delivery is drawn on a line instead in the fabrication machinery post.
| Item | Invented figure |
|---|---|
| Stock order | $41,935 |
| Rate (annual %) | 12.68% |
| Term | 7 months |
| Monthly installment | $6,246.58 |
| Total of installments | $43,726.06 |
| Interest | $1,791.06 |
The payment calculator in the resources section prices a stock order by amount, rate and term, and the inventory turns page there shows how to estimate how long stock sits.
What inventory financing is for a Watertown, SD shop that sells or builds from stock
Put simply, this funding pays for goods a business keeps on hand, either to resell or to turn into its own finished work. For a building supply store that is siding, trim, doors and hardware. For a fabricator it is bar stock, plate and tube. For an auto repair shop it is parts. The goods themselves can secure the funding, which is the main difference from an unsecured working capital loan. Parts carried for an auto repair shop's commercial account turn up in the post on lifts, diagnostic tools and parts.
Manufacturing carries weight in the county: its 82 employer establishments paid $199.8 million in annual payroll in 2023, the largest of any sector in Codington County, SD (CBP). A shop that buys material in volume can price that stock through inventory financing.
To start a request, phone (605) 546-6066 or send the request form, and keep the supplier quote ready. A funding partner may ask for bank statements and a list of current stock; any offer and its terms are the partner's.
By Whitespring Funding Group ยท Updated