Many people are now operating from their mobile devices, and businesses are following suit. While many still rely on computers and laptops, operating from mobile devices can provide efficiency and convenience. One of the many industries that mobile tech is changing is inventory financing. Professionals in this industry are able to leverage mobile tech so that they can provide more accessible and flexible financing solutions to businesses of all sizes.

What Is Inventory Financing?

Inventory financing is when businesses use their inventory to use as collateral to secure funding. It’s often used when businesses need to maintain cash flow or purchase more stock. When a business applies for funding, lenders will assess the value of a company’s inventory. Once approved, the business receives financing, typically as a percentage of the inventory’s worth.

Startup inventory financing solutions help support a business by providing the necessary capital needed to keep the business going. It’s a way for businesses to also access capital upfront so that they don’t need to wait for their products to sell before reinvesting in their operations. Businesses that encounter fluctuating sales cycles can benefit from this because it allows them to maintain consistent inventory levels and meet customer demand.

While inventory financing offers several benefits, it’s also important to take note of the challenges that come with it. Since inventory depreciates over time and may become obsolete, lenders often adjust interest rates to account for this risk. However, inventory financing remains one of the most flexible funding solutions available. Businesses can use it strategically to maintain cash flow, capitalize on growth opportunities, and effectively manage seasonal demand.

Ways Mobile Tech Is Changing Inventory Financing

Through utilizing mobile tech, businesses and lenders can have an easier time with inventory financing. Here are some of the top reasons why:

• Real-Time Tracking

Traditional methods of inventory management rely on periodic stock-taking. This method can be very time-consuming for employees. However, with mobile tech, businesses now have instant access to real-time inventory data. Mobile tech can be integrated with IoT and the cloud. These are essential components for automatically and accurately tracking inventory levels. IoT-enabled devices, such as RFID tags, barcode scanners, and smart sensors, continuously monitor stock movement, while cloud-based systems store and update inventory data in real time.

Through real-time tracking, business owners can have a better look at their inventory values. It provides a more accurate picture of current stock levels so that they can receive the accurate amount. Utilizing mobile tech also means that businesses can track fast-moving items for more optimized stock management.

• Faster Loan Approvals

AI-powered mobile platforms use machine learning algorithms to instantly assess a business’s creditworthiness. These platforms pull data from inventory management systems and market trends more efficiently. This can streamline the loan approval process because there’s no need to wait for lengthy manual reviews or extensive paperwork.

For example, automated credit scoring helps assess a business’ turnover rate. It will also look at different revenue trends and repayment histories that can help lenders come up with an instant credit score. Through this instant credit score, lenders can make better decisions regarding how much credit to extend and on what terms.

• Embedded Financing

Another way mobile tech is changing mobile financing is changing inventory financing is through embedded financing. Embedded financing is when financial services are embedded into non-financial platforms. So instead of banks or third-party lenders, businesses can access financing options directly within the platforms they already use for inventory management, sales, or e-commerce.

For businesses, embedded financing means more direct access to their capital. It will be easier for businesses to secure funding immediately. Additionally, businesses can finance inventory at checkout or via POS, preserving working capital for other operational expenses.

• Blockchain and Smart Contracts

Mobile tech for inventory financing also opens doors for the integration of blockchain and smart contracts. These integrations improve transparency because every transaction will be recorded on the blockchain, which cannot be altered or changed. Lenders and businesses will have better visibility when it comes to their transactions.

On the other hand, smart contracts are self-executing contracts. These automatically enforce the terms of the agreement for both parties. Smart contracts are executed once the predefined conditions of the contract are met.

Both blockchain and smart contracts offer faster loan processing times. The automatic verification process makes it easier to receive financing from lenders. These technologies also removed the need for intermediaries, reducing fees and streamlining the entire transaction.

The Bottom Line

Mobile technology has a serious impact on inventory financing. It makes inventory financing more accessible and efficient, easing the lives of both businesses and lenders. As mobile technology continues to advance, inventory financing will become even more streamlined and data-driven, benefiting businesses of all sizes. This means if businesses want to stay ahead of the curve, it’s important that they look at how they can use mobile technology to their advantage.

Katie Pierce is a teacher-slash-writer who loves telling stories to an audience, whether it’s bored adults in front of a computer screen or a bunch of hyperactive 4-year-olds. Writing keeps her sane (most of the time) and allows her to enjoy some quiet time in the evening before she walks into a room of screaming kids (all of whom she loves dearly) the next morning.