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

P23-EDU · TWENTY3 IntelligenceCash Flow Tool 26·Inventory Financing Cost·Bank LOC · Trade Credit · Factoring·True Cost per Unit per Method·P23-EDU · TWENTY3 IntelligenceCash Flow Tool 26·Inventory Financing Cost·Bank LOC · Trade Credit · Factoring·True Cost per Unit per Method·

Inventory Financing Calculator