Inventory Financing in Goshen, IN: Planning for Lumber and Sheet-Goods Orders

For a plastics shop, inventory means resin pellets, colorant and finished parts waiting to ship. Inventory financing advances money against that stock: a funding partner pays for the resin, holds a claim on it, and is paid back as the molded parts ship and customers settle their invoices.

Not every kind of stock fits. A partner may look at how many weeks the resin takes to turn into shipped parts, whether the material could be resold, and how the shop stores and counts it.

Elkhart County, IN had 69 plastics product manufacturing establishments in the 2023 County Business Patterns (NAICS 3261); a molder among them that buys resin by the truckload for one customer program is the kind of business this funding type is written for.

Purchase order financing is tied to one confirmed customer order rather than to stock already on the shelf. When an OEM orders more frames than a supplier can buy material for, a PO funding partner may pay the material vendor directly and is paid when the OEM settles the supplier's invoice.

Illustration only, invented figures: an OEM sends an invented $96,000 order for trailer frames, and the supplier needs an invented $41,500 of steel tubing and aluminum to build them. A PO partner covers the invented $41,500 vendor bill, the supplier builds and ships, and the partner is paid out of the invented $96,000 invoice once the OEM pays it.

Because the order is what backs this funding, a partner may ask about the OEM's payment record as well as the supplier's own, and may want to see the purchase order and the vendor quote. Film rolls bought for a membrane press come up in the RV supplier article.

1. The shop names the stock: edge banding, hinges, drawer slides and sheet goods for a cabinet run
2. A funding partner sets an amount, which may be a share of the stock's cost rather than all of it
3. The partner holds a claim on that stock until the funding is paid
4. The shop builds, ships and invoices its customers
5. As customers pay, the shop pays the funding down

The schedule follows the stock more than the calendar. Some agreements set fixed monthly payments; others take one sum when the run is sold. The offer states which, along with the rate and any fees.

Frostpine Loans does not fund stock itself. It passes the request to funding partners that offer stock-backed funding, and each one reviews it on its own terms. A partner may ask for:

• Recent business bank statements
• A list of the stock to be bought, with the vendor quotes
• How the shop counts and stores its stock
• Its customer invoices or orders for the run

Manufacturing in Elkhart County, IN takes in 535 businesses without paid employees, by the 2024 Nonemployer Statistics. A one-person cabinet shop ordering sheet goods for a job can request the same funding types a larger plant can.

Illustration only, invented figures: an RV supplier needs an invented $57,600 of aluminum extrusions for a run an OEM has scheduled. An inventory partner funds the invented order at an invented 12.2% annual rate, charged as simple interest, and the supplier pays the whole invented amount back in one sum after 75 days, when the OEM pays. The invented interest comes to $1,443.95, for an invented total of $59,043.95.

If the same supplier buys aluminum every few weeks rather than once per program, a business line of credit may match that rhythm better, and a gap that is about payroll rather than stock fits a working capital loan. When the gap is payroll during a pause in orders, the payroll article sizes a working capital loan for it.