Inventory Financing in Canada up to $2M: Money to Buy Inventory

Inventory Financing up to $2,000,000

Capital to buy stock before you sell it, secured against the inventory rather than your balance sheet. Built for importers, distributors, wholesalers and retailers whose cash is tied up on the shelf.

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Inventory financing is a revolving facility that lets a Canadian business buy stock before it is sold, using the inventory itself as the security. Voxen places facilities from $50,000 to $2,000,000, typically advancing a percentage of the cost value of eligible stock, on 3 to 12 month revolving terms. It suits businesses whose working capital is structurally locked in product — importers, distributors, wholesalers and seasonal retailers — and it is repaid as the stock sells.

What is inventory financing?

Inventory financing is a loan or revolving line secured by the stock a business holds or is about to buy. The lender advances against the cost value of eligible inventory, and the facility is repaid as that inventory sells. Unlike a general operating line, the security is the product itself, which is why a business with a thin balance sheet but real, saleable stock can often access it.

It exists because of a timing problem that has nothing to do with whether a business is profitable. A distributor pays a supplier in March for goods that sell in June. A retailer commits to a seasonal buy months before the season. In both cases the money leaves before it arrives, and the gap is measured in months, not days.

Voxen places inventory facilities from $50,000 to $2,000,000 for Canadian businesses. The advance rate depends on what the stock is: fast-moving goods with a clear resale market and stable pricing support a higher advance than specialized, perishable or fashion-dated inventory. Eligible stock is normally registered under a first charge, and the facility is reviewed as it revolves.

Best for these business situations

Importers paying suppliers months before goods land and sell
Distributors and wholesalers holding stock across a long sales cycle
Seasonal retailers committing to a buy ahead of the season
E-commerce operators funding inventory and ad spend at the same time
Businesses taking a volume discount that requires paying upfront
Manufacturers holding raw materials against confirmed demand
Companies whose bank operating line is fully drawn against receivables
Growth that is outrunning the stock the business can afford to carry

Less suited to

Perishable stock with a short shelf life and no resale market
Inventory already pledged in full to an existing secured lender
Businesses without inventory tracking that can be verified
Slow-moving or obsolete stock that has been sitting for years
Needs better served by factoring, where the money is owed rather than on the shelf

How it works

Show the stock — Send recent inventory reports, supplier invoices and the last six months of bank statements. What matters is what the stock is, what it cost, and how fast it turns.
Advance rate set — We place the file with a lender whose appetite matches your inventory type, and come back with the advance rate, the facility limit and the review cycle.
Draw as you buy — Draw against the facility to pay suppliers, and repay as the stock sells. The limit revolves, so a facility set once carries you through repeat buying cycles.

Money to buy inventory: how it works in practice

Inventory financing, also called inventory funding, is how a business gets money to buy stock without waiting for the last batch to sell. The facility is the same whether you are stocking up for a season, buying for a distribution business or keeping an online store in stock: a revolving limit sized to the cost of your eligible inventory. What the lender looks at changes with the business, and so does the right alternative when the stock does not qualify.

How an advance on inventory value works

The lender values your eligible stock at cost, meaning what you paid for it as shown on supplier invoices, and advances a share of that value, typically 50% to 70%. Retail price does not count. The lender sizes the facility to what the stock would recover if it had to be sold, not to your margin.

Illustration, not a quote: a business holding $400,000 of eligible stock at cost would have a limit of about $200,000 at a 50% advance, $240,000 at 60% and $280,000 at 70%. Where a file lands depends on how fast the stock turns and how easily it resells. The $50,000 minimum works the same way in reverse: at those advance rates it takes roughly $72,000 to $100,000 of eligible stock at cost.

The limit revolves. You draw on it to pay suppliers, new stock joins the borrowing base once it is received with the supplier invoice behind it, and sales pay the balance down so the limit is available again for the next buy. Facilities run from $50,000 to $2,000,000 on 3 to 12 month revolving terms, reviewed as they renew. How much you can borrow against your inventory goes further on what moves the advance rate.

Counted: resellable stock at cost, backed by supplier invoices
Not counted: obsolete or long-unsold stock, consignment goods, and inventory already pledged to another lender

Seasonal stock-up

A seasonal business pays for its stock months before the season pays it back. A garden centre buys in winter, an outdoor retailer buys ahead of summer, a gift shop stocks up before the holidays. The business is profitable over the year and still short of cash in the months before its busiest one.

Inventory financing matches that cycle: draw before the season to pay suppliers, repay as the season sells through, and the limit is there again for next year's order. Terms of 3 to 12 months cover a full season.

Two things make a seasonal file stronger: sales for the same months last year, and stock that still resells after the season. Holiday-only or fashion-dated goods advance at the low end of the range. Apply before the supplier deadline, not after it: a facility funds in days once inventory reporting is in hand, while a bank line increase runs on the bank's review cycle. For the wider picture, see the best financing for a seasonal business.

Wholesale and distribution

Wholesalers, distributors and importers carry the longest gap. They pay the supplier, often before the goods ship, hold the stock, sell to customers on credit terms, then wait to be paid. The cash is out twice: once on the shelf and once in receivables.

A bank operating line is usually margined against receivables, and buying stock creates no receivable, so the line does not grow when the business needs to buy. An inventory facility lends against the stock the bank line leaves out. Many distributors run both, with the security split agreed with each lender before either funds. The inventory financing vs line of credit comparison walks through that split.

Supplier volume discounts and early-payment pricing usually require paying up front. If the discount is worth more than the cost of carrying the facility for the months the stock takes to sell, the larger buy pays for itself. Work that number out with your advisor before you commit to the order.

Retail and e-commerce

Retailers and online brands use the facility to keep enough depth on the shelf to avoid stock-outs, and to place the next order before the last one has sold through.

E-commerce has a double squeeze: stock and advertising are both paid for before revenue arrives. Platform sales reports from Shopify, Amazon and similar make turnover easy to verify, and stock held in a third-party warehouse or fulfillment centre can be financed once the warehouse acknowledges the lender's charge. More in can an e-commerce business get inventory financing and the guide to inventory financing for retailers, importers and e-commerce brands.

When the stock does not qualify, for example launch inventory with no sales history or a single product with no resale market, a merchant cash advance is based on your sales deposits rather than the stock. It costs more and closes faster. The inventory financing vs merchant cash advance comparison sets out when each one fits.

Choosing an inventory financing company

Inventory lenders in Canada differ most in the stock they will advance against, how often they want reporting, and what happens at review. You send Voxen one file, and Voxen places it with the lender whose appetite matches your stock. Whoever you work with, ask these questions before you sign:

What advance rate applies to my type of stock, and what is excluded from the base?
How often do I report inventory, and is there a field examination?
What happens at review if stock ages past its expected turn?
How is the security split with my bank or other lenders?
Is the cost charged on the drawn balance or on the full limit?

Documents to have ready

A complete file is the fastest file: the lender needs to see what the stock is, what it cost and how fast it turns. There is no application fee, and asking for a quote has no impact on your credit.

Six months of business bank statements
A current inventory listing with cost values
Recent supplier invoices behind those costs
Accounts payable and accounts receivable ageing
Sales history that shows turnover, such as POS or platform reports
The storage or fulfillment agreement, if stock sits in a third-party warehouse

Inventory facility structure

Facility Size	$50,000 – $2,000,000
Advance Rate	Typically 50–70% of eligible cost value
Term	3 to 12 months, revolving
Cost	Quoted per file, on the drawn balance
Security	First charge on inventory (PPSA), personal guarantee
Reporting	Periodic inventory listing
Repayment	As stock sells, or at facility review
Time to Funding	Days once inventory reporting is in hand

At a glance

Facility Size	$50K–$2M
Revolving Term	3–12 mo
Primary Security	Inventory

Frequently asked questions

How much can I borrow against my inventory?

The limit is set from the cost value of eligible stock, not its retail value, and lenders typically advance a portion of that — commonly 50% to 70% depending on what the inventory is. Fast-moving goods with a stable resale market support the higher end. Specialized, seasonal or fashion-dated stock supports less, because the lender is pricing what the inventory would realise if it had to sell it.

What is the difference between inventory financing and a line of credit?

A business line of credit is underwritten on overall cash flow and can be used for anything. Inventory financing is underwritten on the stock and is used to buy stock. In practice the distinction matters most when a bank operating line is already fully margined against receivables: the inventory is an asset the existing facility is not lending against, and it can carry its own limit.

Do I need to give up control of my inventory?

No. In a standard facility the stock stays in your warehouse and you sell it in the normal course. The lender registers a security interest and asks for periodic inventory reporting. Field examinations are more common on larger facilities. What you cannot do is pledge the same stock to two lenders — that is the one thing that ends a facility immediately.

Can I finance inventory I have not bought yet?

Yes. That is what the facility is for: you draw on it to pay your supplier, the new stock joins the borrowing base once it is received with the supplier invoice behind it, and sales pay the balance down so the limit is there for the next buy. The lender sizes the limit against eligible stock valued at cost, typically 50% to 70% of what you paid as shown on supplier invoices.

What documents do I need?

Six months of business bank statements, a current inventory listing with cost values, recent supplier invoices, and your accounts payable and receivable ageing. If stock is held at a third-party warehouse, the storage agreement matters too, because it affects who can access the goods.

Is inventory financing available to e-commerce businesses?

Yes, and it is one of the most common uses. E-commerce operators carry the double squeeze of paying for inventory and advertising before revenue arrives. Platform sales data — Shopify, Amazon and similar — makes stock turn easy to verify, which generally helps the file rather than hindering it.

What happens if the stock does not sell?

The facility still has to be repaid, which is why advance rates are set below cost value and why lenders care about turn rate more than volume. Ask before you sign what happens at facility review if inventory ages past its assumed turn — that clause, not the headline rate, is what determines how the facility behaves in a bad season.

Can I get inventory financing if the bank has already declined?

Often, because it is a different test. A bank margins its operating line against receivables and filed financial statements. An inventory facility is underwritten on the stock, its turn rate and its resale market. A business that fails the first test can pass the second, and that is why the two frequently sit side by side rather than replacing one another.

How do I get money to buy inventory?

In Canada there are three usual routes. A bank operating line increase is the cheapest if the bank agrees, but those lines are usually margined against receivables and do not grow when you buy stock. An inventory facility is secured on the stock itself, typically 50% to 70% of eligible stock at cost, from $50,000 to $2,000,000, and revolves as you buy and sell. A merchant cash advance is based on sales deposits rather than the stock; it closes fastest and costs more. For a buy you repeat every season, the revolving inventory facility is usually the fit.

Can I get inventory financing without a credit check?

Asking Voxen for a quote has no impact on your credit. Before approving a facility, most inventory lenders do review credit, because the facility carries a personal guarantee. Credit is not the main test, though: the facility is sized to the stock, how fast it turns and how easily it resells, so a business with bruised credit and good inventory can still qualify. If both the credit and the stock are weak, a merchant cash advance looks at sales deposits instead of a credit score.

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