A store can pay for stock with supplier terms, inventory financing secured by the goods, or a revolving line of credit. Quarrystone Loans, a small-business funding broker in Sumter, South Carolina, compares the three for Sumter County retailers, the county's largest sector by count, and explains the aging and turnover figures partners request; lending partners decide and set terms.
Stores in Sumter County, SC
With 370 employer establishments in 2023, retail was the biggest sector in Sumter County by count, and 138 of those stores had fewer than five employees (U.S. Census Bureau, County Business Patterns 2023). Within the office ZIP code, 29150, retail also led with 266 establishments (U.S. Census Bureau, ZIP Code Business Patterns 2023). A small store has little room to carry slow stock, so how it pays for inventory affects its cash every month.
Supplier credit, stock loans or a revolving line
| Option | How it works | Cost to watch | Fits when |
|---|---|---|---|
| Supplier terms | The supplier ships now and bills in 30, 60 or 90 days | Lost early-payment discounts; late fees | You sell the goods before the bill is due |
| Inventory financing | A partner funds the purchase; the goods secure it | Interest, fees, reporting duties | Stock is large and sells steadily |
| Line of credit | Draw to pay invoices, repay as goods sell | Interest on the drawn balance, line fees | Orders recur in different sizes |
Many stores use all three: supplier terms first, a line for timing gaps, and inventory financing for a large one-time buy.
Start with what suppliers will give you
Supplier credit is often the cheapest stock financing a store can get, because the supplier wants the sale. Ask existing suppliers for longer terms before asking anyone else for money. If a supplier offers a discount for early payment, compare the discount with what borrowing would cost for the same number of days; sometimes it pays to borrow and take the discount.
What partners ask a store to show
Inventory partners care less about the total stock value than about how quickly it turns into cash. Expect these requests:
- An inventory report at cost, not at retail price.
- Aging: how long each category has sat on the shelf.
- Turnover: cost of goods sold for the year divided by average inventory at cost.
- The planned order: the supplier, the items and the price.
Work out turnover by hand before you call. If a category turns slowly, a partner will discount it heavily or exclude it, and clearing it first can strengthen the request more than any explanation.
Sizing the order before you finance it
- Start from what sold in the same categories over the last full year.
- Subtract what is already on the shelf and on order.
- Add only what you expect to sell before the financing comes due.
- Check that the payment still works if sell-through is slower than planned.
Financing stock that ends up marked down converts a short-term debt into a long-term loss.
Collateral and the lien
Inventory financing normally comes with a UCC filing that tells other creditors the goods are pledged. Read the collateral description: some agreements cover only the financed stock, while a blanket lien reaches the store's fixtures and receivables too. A blanket lien can make it harder to finance a fit-out or equipment later, so ask whether it can be limited.
Card-heavy stores and advance offers
Stores with steady card sales often receive merchant cash advance offers to buy stock. An advance is not a loan; it is a sale of future receipts with a fixed total to be collected. Compare that total with the cost of a line or inventory financing for the same purchase. Retail store financing covers fit-outs and fixtures, Sumter County figures give the local picture, and the Quarrystone blog has more posts.
By Quarrystone Loans · Updated