What Is Warehouse Lending?

Inventory loans are loans that use corporate inventory or commodities as collateral. A type of short-term commercial mortgage in the United States. This method is commonly used by wholesalers and retailers on financial services, and manufacturing companies sometimes apply for such loans. When issuing a loan, first of all, it is necessary to investigate the credit status of the borrowing company and analyze the company's ability to pay debts; secondly, it is necessary to determine the percentage of loans, that is, to determine the discount rate of the loan based on the ease of sale, market stability, and fragility of the inventory; Third, we must go through the formalities for setting up pledge of movable property. ^[1]

Inventory loan

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Inventory loans are loans that use corporate inventory or commodities as collateral. A type of short-term commercial mortgage in the United States. This method is commonly used by wholesalers and retailers on financial services, and manufacturing companies sometimes apply for such loans. When issuing a loan, first of all, it is necessary to investigate the credit status of the borrowing company and analyze the company's ability to pay debts; secondly, it is necessary to determine the percentage of loans, that is, to determine the discount rate of the loan based on the ease of sale, market stability, and fragility of the inventory; Third, we must go through the formalities for setting up pledge of movable property. ^[1]

Borrowers use the goods they produce as a form of loan collateral. These goods produced by the borrower are stored in a third party, usually a warehouse operator. The warehouse operator should be responsible for maintaining the quality of the stored goods, and the borrower should bear the rental cost of the warehouse. The borrower can obtain a loan from the lender with a warehouse receipt indicating the quantity and quality of the goods stored

An arrangement in which a borrower uses the goods it produces as collateral for a loan. These products usually need to be stored in a third party, usually a warehouse operator. The warehouse operator is responsible for the quality of the stored goods, and the borrower should bear the rent of the warehouse. The borrower can obtain a loan by virtue of the warehouse receipt of the commodities stored.

Inventory loan: Inventory credit

Synonym: Warehouse receipt financing