The Different Options to Finance Your Business Inventory
For many SMEs, inventory ties up a significant portion of cash flow. Finrack offers an alternative to traditional credit: converting inventory into liquidity through a temporary sale with buyback mechanism.
As Xavier Corman summarizes: “Our method is quite unique. We do business financing through inventory. Any company with stock and a cash need can come to us.” – Xavier Corman, CEO of Finrack
In Brief: 3 Options Offered by Finrack
- Standard inventory financing: starting from €250,000 for SMEs with digitalized, valuable stock.
- Finrack+: up to €3 million, backed by credit insurance.
- Sector-based, selective approach: Finrack finances liquid, traceable, and resellable inventory with daily tracking.
Standard Inventory Financing
The model is based on an inventory invoice: the company sells its stock to Finrack, receives cash, keeps the inventory physically on-site (company or logistics provider), and buys it back at the same price upon maturity.
“A company will ‘sell’ us its stock. We pay the invoice. The company buys back its stock at the same price at contract end.” – Xavier Corman
Key Operational Points:
- Business continuity: the stock doesn’t move; production and sales continue.
- Replenishment: each stock withdrawal is replaced with an item of equivalent value.
- Mandatory digital traceability: daily tracking (via file or direct system connection).
“In stock management, if I take two apples and put back three pears of equal value, we’re satisfied. What we want is for the total value of the stock to remain stable, or above a certain level. In that case, the company can continue operating as usual. The only mandatory condition: the inventory must be digital.” – Xavier Corman
Financial and Accounting Framework
The financing doesn’t affect liabilities: it transforms the asset (stock → cash + buyback right).
“Our financing isn’t a loan: it only impacts the asset side, not liabilities.” — Xavier Corman
Result: the company preserves its debt ratios and borrowing capacity for potential future loans.
Eligibility and Selectivity
- Minimum ticket: €250,000 financed
Target: SMEs with €5–7M+ in annual revenue and valuable stock - Requirement: positive equity
- Typical contract: 1 year, no interim payments, repaid at term, renewable
- Fund release: around 60 days after signature (can be faster depending on client responsiveness)
“We analyze the company and its stock. We’re selective. After review and setup, we release the funds and the contract begins. We usually say 60 days, but it can be faster. The contracts last a year, no monthly repayments, and they’re renewable.” – Xavier Corman
To explore further:
Finrack+: Up to €3M with Credit Insurance
Finrack+ follows the same sale-and-buyback model, but adds credit insurance to secure higher financing amounts.
“From €750,000, we can go up to €3 million with Finrack+, provided insurance is in place.” – Xavier Corman
- Amounts: from €750,000 to €3 million
- Credit insurance: taken on the client or a related entity (e.g., strong shareholder)
- Monitoring: same as the standard model (on-site inventory, value-for-value replenishment, daily reporting)
- Objective: meet the ambitious needs of growing SMEs and midcaps
For more details, visit our Finrack+ page.
Rigorous Selection of Financed Stock
How Finrack Values Inventory
Finrack uses a proprietary algorithm to automatically value inventory. It considers criteria such as liquidity, age, quality, and market value. This explains the minimum ticket sizes, per-product ceilings, and valuation ranges.
“A stock with a book value of €1 million may be valued between €250,000 and €800,000 by us.” – Xavier Corman
Examples:
- Food: flour, sugar, honey, finished goods
- Beverages: soft drinks, beer, aging spirits
- Medical: medical devices, pharmaceuticals, para-pharma
- Trade/Industry: used cars, steel products, industrial equipment
Why Choose Finrack When Banks Say No (or Even Yes)?
Finrack is funded by private investors, allowing an entrepreneurial risk mindset.
“The key advantage is accessibility: when banks say no, Finrack can still be an option. We’ve built a tool to value stock in real time. That’s our strength.” – Xavier Corman
For the company, the impact is doubly beneficial. First, inventory financing doesn’t appear as a liability, preserving financial ratios and improving the balance sheet; reassuring financial partners. Second, since it doesn’t consume bank credit, it preserves borrowing capacity for strategic needs; CAPEX, M&A, modernization, etc.
This solution also fits well within a broader financing architecture: it can be combined with complementary levers like factoring at the end of the sales cycle, smoothing cash flow at every stage: procurement, production, and receivables.
Conclusion
Finrack options turn an often-underutilized asset, your inventory, into a strategic cash flow lever:
- Standard financing: from €250,000, fast, off-balance-sheet, uninterrupted operations
- Finrack+: up to €3M with credit insurance, for ambitious needs
- Selectivity: only companies with liquid, digitalized inventory are eligible
To assess your fit, start with our inventory financing page, review financed examples, and check your eligibility in the sectors we serve.
Also, read our latest article comparing inventory financing with cash credit.
Written by Xavier Corman (CEO & Co-founder) – About Finrack – helping you build more agile and efficient inventory and cash flow management.