Inventory pledge credit

It is the most basic product in inventory financing and is also the most widely used product by banks. It refers to a credit product in which the borrowing enterprise pledges its own or third-party legally owned movables. In order to control risks, banks generally require third-party logistics companies or regulatory agencies to supervise the inventory pledged goods provided by customers. There are two types of inventory pledge credit: static and dynamic. The credit requirements for static inventory pledges are relatively strict. Customers are not allowed to barter, but can only barter with money. In actual production transactions, the company's goods flow relatively frequently, and static pledge credit will seriously restrict the normal operation of the company. Therefore, static pledge credit is often rarely used, and dynamic inventory pledge credit is the main inventory pledge credit product used by banks.

Compared with static pledge credit, dynamic pledge credit is to set a limit on the inventory value used by the customer to guarantee. The customer must ensure that the value of the inventory guaranteed cannot be lower than this limit and higher than this limit during the production and operation process. Inventory customers within this boundary can use it freely. Under this model, customers can either barter or pay for goods, and daily production and operation activities are much less restricted. Moreover, companies generally do not need to add margin for redemption during the credit period, and the benefits of companies relying on inventory for financing are very obvious.

Although the scope of inventory has become wider, banks still have certain restrictions on the types of inventory used by enterprises to guarantee due to risk considerations and loan convenience. Banks tend to pledge goods of the same type, such as steel pipes, steel products, etc., and the value of the goods is relatively easy to determine, such as non-ferrous metals, ferrous metals, wood, etc. In terms of pledge rates, different types of inventory and different banks will set different pledge rates. Generally speaking, raw materials are relatively easy to liquidate and have a relatively high pledge rate. Although finished products have a high market value, they are relatively difficult to liquidate, so the pledge rate will be lower.