A successful retail business depends on a smooth flow of inventory throughout the distribution channel and having the inventory that customers want. For some businesses, especially those that carry several different brands and have seasonal ebbs and flows, securing the capital needed to maintain the right amount of inventory can help them succeed financially. When pressed for cash flow, it can be difficult to make important investments to grow a business, like investing in system upgrades, carrying a new product line or securing additional warehouse space. For some businesses, uncertain or inconsistent cash flow can even lead to a choice between paying rent or payroll.

Many manufacturers sell through an independent dealer network, including those that sell products such as boats, recreational vehicles, lawn mowers, appliances and motorcycles. Inventory financing can be an effective way for these dealers to carry more products, provide better service to their customers, maintain optimal inventory levels and focus on what matters most to them – managing and growing their business. Inventory financing can also help manufacturers improve liquidity, accelerate funding to reduce their days sales outstanding (DSO) ratio and reduce expenses by transferring collection, underwriting, and collateral management services to an inventory financing specialist. In short, inventory financing is a type of asset-backed lending used to purchase inventory, and the inventory in turn serves as part of the collateral for the line of credit*. For larger products, as the inventory is sold, the proceeds are used to pay down the line of credit. For other smaller products that turn more quickly, the payment terms are predetermined and closely mirror the inventory turn. New inventory is then purchased, repeating the cycle. This type of funding can be an important tool for businesses that experience sharp seasonal fluctuations in sales, as it enables them to buy—and sell—more inventory during their peak season.

*Subject to credit approval, fulfillment of conditions and satisfactory legal documentation

The benefits of working with an inventory financing source aren’t limited to helping maintain optimal inventory levels and so choosing the provider that is right for your type of business is critical. To get the most from your relationship with your inventory financing provider, look beyond the funding component to include these considerations in your selection process:

Industry experience and expertise

With more than 60 years’ of total global experience, Wells Fargo Commercial Distribution FinanceTM (CDF) is the inventory financing provider of choice for more than 30,000 dealers and 1,200 manufacturers (OEMs) and distributors. Many of our team members are considered experts in their respective industries, regularly sharing their expertise by authoring publications and participating in industry roundtables. Our salesforce is aligned to the specific industries it serves and with an average tenure of 20+ years, we understand the importance of being there for our customers. CDF’s customers are able to tap into this expertise and deep knowledge base for solutions for their businesses. In fact, 96% of our customers say that CDF helps them grow and succeed.1

Tools to help manage inventory

The right financing provider should offer solutions and intelligence that are tailored to support your specific type of business. For example, CDF provides customers with the following:

  • Customer Online Management System (COMS) helps you efficiently manage your inventory with 24/7 access to account information, billing statements, secure payment options, inventory management reports, analytics, and more. By using COMS, our customers can receive real-time notifications on key account activity and have access to data to help make more informed business decisions.
  • Analytics tools offer insights into the performance, aging and health of your portfolio, and allow you to compare your results with those of your peers.
  • Economic reports and commentary from the Wells Fargo Economics Group to help you manage risk and capture business opportunities.


With CDFconnectTM, we take our relationship to the next level. Whether planning for the sale of your business, engaging in an impactful event, leading process improvement workouts or providing access to subject matter experts, data and other resources, we are here to help our customers tackle their biggest challenges and capitalize on their business opportunities. CDFconnectTM has more than 20 different ways we can help our customers.

To learn more about inventory financing and whether it is right for your business, visit us at cdf.wf.com.

(1) 96% of US & Canada based survey respondents answered “yes” to the question “Does your relationship with CDF help your business succeed or help enable your growth?” Includes 3,835 responses received from January 1, 2018 to December 31, 2018.