Inventory Financing with Gold Loans - All You Need to Know

Aug 08, 2020

Emergency situations have time and again revealed just how volatile the commercial sector can be. While the conglomerates and other large business houses may have the necessary financial backing to recover, smaller businesses are especially hit hard. Some companies may even decide to shut down operations permanently for the lack of funds to procure and manage inventory, the core driver of business purpose fulfilment.

So, how can the scenario be overcome? Can businesses procure necessary inventory and fulfil customer demand to survive under such circumstances?

Well, with favourable inventory financing options available in the market, meeting stock requirements and recovering from a difficult financial period is now possible, even for small-scale businesses.

Inventory Funding and Its Applications

You may be wondering what an inventory loan is. It is a secured form of credit that lenders extend to businesses to help them maintain the required line of stock. For instance, if you run a pharmacy, you can avail this loan to purchase sufficient stock of medicine and drugs. Keep in mind though that this supply must remain in storage for some time before it can be sold to consumers for this form of financing to work.

Thus, with such a loan, the stock you purchase also acts as collateral for the credit. Therefore, if a borrower is unable to repay the debt in time, lenders can recover the remaining dues utilising this inventory.

In case a borrower wants to keep the inventory free from such charges and seek alternate financing options, loan against their household gold jewellery or ornaments can be utilised to raise inventory financing quickly and easily.

Emergency Inventory Funding Needs for Businesses

Loan against inventory and other forms of business lending are essential for enterprises to survive during strict financial constraints.

A deficiency in business capital leads to a distinct shortage of cash flow, restricting purchase of inventory as well. You can turn to lenders offering hassle-free financing options to ensure inventory procurement and regularise day-to-day running of the business.

Thus, inventory-financing companies can certainly help resolve your shortages of stocks. Gold loans come off as a suitable financial assistance to infuse additional cash into your enterprise, ensuring smoother recovery post a financial crunch.

Features and Benefits of Gold Loans as Inventory Finance

Just as lenders offer inventory loans against your stocks, gold loan providers offer financial assistance against the gold jewellery that you own.

Listed below are some benefits of gold loans –

  • Instant disbursal

Does your business require financial help immediately like a supplier waiting for payment or a pending rent of the warehousing premises?

Such situations are extremely common for businesses, where there is no scope for you to wait and fill out long application forms. If such is the case, gold loans are an ideal solution to all your financing worries.

These loans generally have a simple approval process. Rupeek Fintech Private Limited goes one step further in easing the hassles of loan application by offering gold loans at your doorstep.

You heard that right!

You no longer need to stand in line to apply for a loan. Instead, a loan manager will visit your house after you apply via the mobile application or the website to weigh your gold and complete valuation.  The loan is then approved accordingly and disbursed to your bank account.

What’s more? The process takes only 30 minutes to complete, thus providing instant access to finance. Also, the loan manager leaves with the pledged gold only after the funds are credited to your account.

  • High security for the pledged asset

When dealing with gold, the very first thought that comes to your mind is its safety. For Indians, gold holds a distinct emotional value apart from its monetary worth. Thus, you would want to avoid loss or damage to such jewellery at any cost.

Thankfully, the best lenders assure safety of the pledged gold in their possession by following strict security protocols during asset handling and storage.

Safety measures with Rupeek include transporting the gold in a GPS-trackable bag and storing it in a safety vault of a nearby partner bank branch within 3 km of your home. Additionally, the lender also provides insurance for the jewellery, which remains valid until you release the pledged gold after loan repayment.

  • Minimal documentation necessary

Have you ever applied for a loan, only to be impeded by a lot of paperwork? Emergency financing of your inventory requirements can become difficult if you need to provide a bunch of documents against the said credit.

However, when you seek inventory financing by pledging your gold, you can avail the said loan by submitting KYC documents.

  • A high loan to value (LTV) ratio

You can avail a considerable sum against the value of gold you pledge with a high LTV from your lender. LTV or loan to value ratio is the percentage of a pledged asset’s value that a lender provides as loan. A high LTV maximises your chances of raising a sizable amount as loan.

The substantial value of funds can help in fulfilling all your inventory requirements, such as supplier payment, inventory warehousing and the likes. Rupeek Fintech Private Limited offers the highest LTVs on gold loans, transcending into a high per gram value.

Moreover, with no end-use restrictions, you do not have to encounter any limit to the utilisation of such loans.

  • Low interest rates to reduce repayment burden

Rupeek Fintech Private Limited also offers gold loans at lowest interest rates and highest LTV in the market. Therefore, you can avail this loan without overburdening your business finance. Along with minimal interest, you can also utilise flexible repayment options to reduce all hassles or repayment worries.

For example, borrowers can pay the interest portion of the gold loan during their tenure, while deferring principal repayment to the end of the loan tenure. One can also choose to defer the entire repayment liability to the end of the term, thereby settling all dues through a single bullet payment.

All these advantages have driven gold loans as a suitable funding alternative to conventional inventory financing options. Avail the hassle-free funding option to sail through your worries regarding inventory stocking, payment or storage and maintain the smooth running of your business.