By using inventory as collateral, companies are able to open a revolving line of credit or borrow short term. By increasing cash flow through existing assets, the borrower is able to deploy cash to other areas of the business such as sales and marketing to best maximize growth potential.   

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Advantages:

• Allows companies to increase inventory for larger orders and avoid out-of-stock situations

• Reduces cash cycle

• Enables redeployment of cash within the business to drive growth

• Frees up capital stuck in inventory for new customer acquisition, sales and marketing strategies that result in greater revenue