Lewiston, Idaho Inventory Loans: Buy the Parts, Food or Plants First, Then Pay as They Sell

A repair shop that keeps common tire sizes, brake pads and oil filters on the shelf can finish a job the same visit instead of waiting on a parts run. Stocking that shelf in one order ties up cash for weeks, which is the gap an inventory loan is built for.

Illustration only, invented figures: a $14,500 shelf of tires, pads and filters, spread across 6 monthly payments at an annual rate of 13.25%. Each payment is $2,510.92; the six payments come to $15,065.52, so the interest on the order is $565.52. The figure to test is the payment against parts sales: in this example, the shelf has to sell at least $2,510.92 of parts a month, at cost, before the markup on those parts is money the shop keeps.

If the tires sit longer than six months, the loan is being paid from other income. That is the moment to order smaller lots more often rather than stretch the term.

Inventory financing is a loan or credit line used to buy goods the business will sell, or use up on customer jobs, and those goods can be pledged as collateral. A partner may fund only part of the invoice, because stock that has to be sold off in a hurry brings less than its cost. Perishable food and live plants can be judged differently from parts that keep for years.

The financed goods can be the whole security, or the agreement can add a lien on other business assets or a personal guarantee. That one term separates two offers that look alike on price, so ask a partner what the lien covers before comparing anything else.

Parts counters are one place this applies. County Business Patterns listed 15 automotive parts, accessories, and tire stores (NAICS 4413) among Nez Perce County, ID employers for 2023; a parts counter that buys stock ahead of the sale is the case inventory financing covers.

Purchase order financing pays a supplier for the goods needed to fill one confirmed customer order. The provider collects when the customer pays, then keeps a fee and passes on the rest. It is not one of the six options arranged through this site, but the example shows when a short credit line draw or inventory financing can do the same job.

Illustration only, invented figures: a sit-down restaurant signs an $8,400 catering contract that needs $3,100 of food and disposables bought up front. The event is 20 days out and the customer pays 30 days after it, so the cost is carried for 50 days. A purchase order provider charging 3% of the supplier payment for each 30 days, or part of one, would take 2 periods, or $186.00. A credit line draw for the same $3,100 at an annual rate of 12.5% over 50 days costs about $53.08 in interest, before any draw fee.

Full-service restaurants employed 584 people across Nez Perce County, ID in the March 2023 pay period, at 27 employer establishments (County Business Patterns, NAICS 722511). A kitchen of that kind that takes catering work more than once a year can compare a standing credit line with paying per order.

A landscaping company that installs lawns and plantings has to buy the sod, shrubs, mulch and irrigation fittings before the customer pays for the job. An inventory request for that stock moves through these stages:

1. Price the order from the nursery or supplier quote, with delivery dates.
2. Call (208) 361-6012 or send the request form, then go over the nursery order on the call.
3. A partner reviews deposits, time in business and existing debt, and may check credit.
4. Any offer names the share of the order it funds, the term, the payment and what the lien covers.
5. If the owner accepts, the partner can pay the supplier directly or fund the business account.
6. Payments run on the agreed schedule while jobs are billed and paid; the lien on the goods ends at payoff.

Crews in this trade are small. In Nez Perce County, ID, the 26 landscaping services employer establishments in County Business Patterns had 76 paid employees between them in March 2023 (NAICS 561730), and 22 employed under five people.

Separately, Nonemployer Statistics for 2024 counted 51 landscaping businesses in the county with no paid employees (NAICS 56173). A one-person crew can send the same request.

Banks, credit unions and finance companies can all offer inventory financing, and their offers differ in more than price. For a kitchen buying proteins, dry goods and paper stock in bulk, these are the lines to read side by side:

• The share of the supplier invoice funded, and who pays the supplier.
• Whether the lien covers only the goods bought or every business asset.
• Reporting duties, such as a monthly stock count sent to the partner.
• The payment schedule and whether it can be paid down early without a charge.
• Every fee in dollars, added to the interest for a total cost.

Food bought this way has a short shelf life, so a term longer than the time it takes to use the stock rarely makes sense. Owners comparing a standing reserve with a loan for each order can read about the commercial line of credit or see every option on the business financing options page.