Oceangate Funding Group, a small-business funding broker in Ogden, Utah, explains inventory financing: funding to buy stock, secured by that stock and usually recorded with a UCC financing statement, repaid as the goods sell or on a schedule. Lending partners review sales history, turnover and margins, then decide and set terms. Floor plan financing is one specialized form.
| Built for | Stock bought before it sells |
|---|---|
| Security | The stock being financed, typically noted in a UCC filing |
| Repayment | Tied to sales, or on a set calendar |
| Partners usually review | Sales history, turnover, margins, supplier terms |
| Weber County context | 731 retail and 254 wholesale employer establishments (CBP 2023) |
How inventory financing works
A partner advances money against stock you are buying, or stock you already hold. Because goods lose value if they do not sell, partners usually advance only part of the inventory's cost and look closely at how quickly it turns. The partner records its interest in the inventory, commonly by filing a UCC financing statement with the state, so other lenders can see the claim.
Repayment can follow sales, with a portion of each sale applied to the balance, or follow a fixed schedule regardless of sales. The first suits seasonal sellers; the second is easier to plan around but less forgiving in a slow month.
Floor plan financing, explained
Floor plan financing is a form of inventory financing used for high-value items that are tracked one by one, such as vehicles, boats, trailers or large appliances. Each unit is financed when it arrives and paid off when that specific unit sells. A floor plan example: a dealer takes delivery of ten units, each financed separately; when unit four sells, the dealer pays off unit four's balance. Partners usually audit floor plan inventory to confirm each unit is still on hand.
Inventory financing for ecommerce
Online sellers often face the longest gap of all: paying a manufacturer before goods ship, waiting for freight, and then waiting for marketplace payouts. Partners who fund ecommerce inventory look at sales history by channel, return rates and payout timing. Inventory held in a third-party warehouse can complicate the security, so expect questions about where the goods are and who controls them.
Retail and wholesale in Weber County, UT
Weber County had 731 retail trade employer establishments with 12,380 paid employees in 2023, and 254 wholesale trade establishments with 5,077 (U.S. Census Bureau, County Business Patterns 2023). Wholesalers skewed smaller: 48.0 percent had fewer than five employees, against 38.0 percent of retailers. Another 1,653 retail businesses operated with no paid employees in 2024 (U.S. Census Bureau, Nonemployer Statistics 2024), many of them the online and market sellers who buy stock in batches.
Inside ZIP code 84401, which includes the office's block of Washington Blvd, retail trade accounted for 175 employer establishments and wholesale trade for 102 in 2023 (U.S. Census Bureau, ZIP Code Business Patterns 2023). More context is on our Ogden, UT page and in the industry pages.
Stock financing next to a credit line and working capital
- Inventory financing ties the money to the goods. It can open options for businesses whose main asset is stock.
- A line of credit is more flexible: draw for stock this month and payroll next month. It usually depends more on deposits and credit than on the inventory.
- Working capital suits a single purchase with a clear payback, without tying the security to specific goods.
All six structures are side by side in the comparison table.
Turnover: the number partners watch
Inventory turnover measures how many times stock sells through in a year: cost of goods sold divided by average inventory. Fast-turning stock reassures a partner because the collateral becomes cash quickly; slow-turning or seasonal stock may lead a partner to advance less against it or require a fixed repayment schedule. If you track turnover by product line, bring it, along with any items that have not moved in a long time, since partners often exclude those from what they will finance.
What lending partners usually review
- Sales history and inventory turnover, ideally by product line.
- Gross margins, to judge how much cash each sale returns.
- Supplier terms, quotes or purchase orders for the stock to be bought.
- Where inventory is stored and how it is counted.
- Existing UCC filings that already claim the inventory.
A partner may decline even a well-documented request, and terms vary by partner. How a request moves explains our role before and after the partner's review.
By Oceangate Funding Group · Updated