Online lender Dealstruck announced Thursday (March 5) that it has added a new credit product to its offerings for companies looking to better manage their inventory.
Reports say the company has launched the Inventory Line of Credit service aimed to help companies manage their cash flow as they navigate recurring needs to procure inventory. The credit product, Dealstruck said, is targeted toward wholesalers, distributors and other small businesses relying on their access to inventory to stay afloat.
According to Dealstruck, the Inventory Line of Credit product makes the company the first online lender to offer multiple credit products. Dealstruck already offers asset-based and term loan lines of credit.
To secure the credit, Dealstruck said, companies must provide an inventory purchase order. Dealstruck then pays off that invoice to the supplier directly, allowing the sellers to pay back the cash advance as they sell the products from that updated inventory. The credit is repaid on weekly installments, and companies can access up to $250,000 depending on their credit.
The company said that its new product was released with the recognition that small businesses often have to hold off on purchasing more inventory until all of their current inventory sells. That system leads to value being stuck in existing inventory, restricting companies’ abilities to grow.
The Inventory Line of Credit is also a way for SMEs to access funding from somewhere other than a big bank, according to Dealstruck co-founder and CEO Ethan Senturia, who added that the firm lent $35 million to hundreds of small businesses across the nation last year.
Looking ahead, Dealstruck said it will look to lend more than $100 million to SMEs in the nation in 2015.
According to the most recent research, small business lending in the U.S. dropped in January compared with December 2014, but approval rates for small business loans by big banks were actually up in January.