Cash Flow Tool 26

Inventory
Financing
Cost

Compare the true cost of financing inventory through different structures: bank line, trade credit, factoring, and revenue-based. Know your fully loaded financing cost per unit.

1Inventory Context

Total Inventory Value (COGS) ($)

Avg Inventory Turns / Year

Unit COGS ($)

2Bank / LOC Financing

Credit Line Rate (% p.a.)

Line Availability (% of inv)

Origination / Annual Fee ($)

3Trade Credit / Net Terms

Supplier Net Terms (days)

Early Pay Discount Available (%)

% of COGS via trade credit

4Factoring / ABL (if applicable)

Factoring Rate (% of invoice)

Per invoice, not annual

Advance Rate (% of AR)

Annual AR Volume ($)

Most Cost-Effective Financing·

Bank LOC
Cost/Unit

Trade Credit
Cost/Unit

Factoring
Cost/Unit

Financing Cost per Unit - All Methods

Bank / LOC annualized·

Cost per unit (bank)·

Trade credit cost (forgone EPD)·

Cost per unit (trade credit)·

Factoring annual cost·

Cost per unit (factoring)·

Financing Comparison

Method	Annual Cost	Cost/Unit	Effective Rate

Inventory financing.What it costs. What you keep.

Inventory financing.
What it costs. What you keep.