1. What is inventory financing?

Inventory pledge financing refers to the borrower borrowing money from the lender with inventory as pledge. In order to realize the transfer and possession of the pledge, the lender entrusts the logistics enterprise or asset management company as an independent third party to supervise and store the inventory as the pledge. At present, there are three kinds of inventory pledge financing methods commonly used in the world: warehouse financing, trust receipt financing and mortgage bill inventory financing.

1. Warehouse financing.

The borrower stores the inventory in the warehouse designated by the bank and is managed and kept by a third party. After the borrower sells the inventory, the buyer directly pays the payment to the borrower's account in the bank, and the bank directly reduces the loan with the payment. According to the location of warehouses, warehousing financing can be divided into open-air warehousing and on-site warehousing: open-air warehousing is to store inventory in a third-party warehouse, while on-site warehousing is to store inventory in a borrower's own warehouse, and banks employ a third party (usually called on-site warehousing management company) as their agent or directly send managers to manage inventory.

4. Trust receipt financing.

The so-called trust receipt refers to the certificate that the borrower holds the goods on behalf of the bank and the bank has "temporary legal ownership" of the goods. After using the bank loan to purchase goods, the borrower issues a trust receipt to the bank. The trust receipt stipulates that the relationship between the bank and the borrower is that of the principal and the trustee. The goods are held by the borrower for the bank, and the borrower either stores the goods in an open warehouse or keeps them locally, without the need for a third party to participate in the management of the goods. After the goods are sold, the borrower transfers the payment to the bank loan account on the same day.

3. Mortgage inventory financing.

Mortgage bill is a document issued by a third party to the bank on a regular basis, and the third party guarantees the existence of inventory as collateral for the loan. The inventory of an enterprise is usually in a state of constant flow, but the enterprise generally keeps a part of the inventory. The third party can track the sales activities of the enterprise, track the floating value of the enterprise inventory, and ensure that the inventory will be converted into accounts receivable at the end of the sales activities. In fact, the work of the third party replaces the supervision of the bank staff on the enterprise, which reduces the credit cost of the bank, and makes the operation of the enterprise more flexible because there is no need to physically separate and occupy the inventory.

Second, the basic process of inventory financing:

The basic process is as follows:

1, the exporter stores the goods in the warehouse (if the goods are exported by domestic enterprises, they are generally stored in the bonded warehouse); 2. The bank obtains a security interest in the goods.

3. Banks need to inspect the goods to protect their security interests;

4. Banks provide financing funds to exporters;

5. Exporters sell goods to importers;

6. The warehouse will inform the bank of the delivery information (mainly to help the bank grasp the actual sales situation of the goods);

7. The importer pays the corresponding amount to the special bank account;

8. The income from this special account shall be regarded as the repayment principal and interest of the exporter;

9. If there is any balance, the bank will transfer it to the exporter.

10, if the exporter has found a good buyer when requesting financing, he can also choose accounts receivable financing. But for banks, it is obvious that inventory financing is less risky than simple accounts receivable financing, because banks have checked the inventory in the warehouse, and the warehouse helps banks monitor the sales of goods. Of course, the corresponding costs will be transferred to the financing costs of exporters. If the exporter has not found a buyer when he asks for financing, then inventory financing is a very suitable financing method, because the exporter can get the funds first, then sell them and return them to the bank with the money from the sale. Especially when exporters are middlemen themselves and need funds to raise goods.

When the supplier pays, but no buyer can be found, the inventory financing method can be considered, and the external payment can be made through bank financing before the goods are sold.

Third, the advantages and disadvantages of inventory financing

1, with flexible funds.

Because the amount of financing is linked to the amount of inventory, and the amount of inventory is directly linked to the financing demand.

2. The form of site warehouse makes banks more willing to accept inventory as collateral.

3. The special supervision of the on-site warehouse company can reduce the enterprise management, insurance costs and the possibility of theft, which may save the company money.

4. Through the cooperation agreement with the bank, by providing custody, supervision and guarantee services, the service enterprises are guaranteed to obtain bank financing, thus deepening the business cooperation relationship between the warehousing company and the service enterprises; By providing financial services, the number of customers of warehousing companies can be increased.

5. The role of helping banks expand their business scope.

Through tripartite cooperation, the problem of inventory mortgage supervision is solved, and through the custody and guarantee of warehousing companies, it is helpful to achieve the goal of credit risk control, expand business scope and increase customer scale. Compared with credit financing, pledge financing is supervised by warehousing companies, and the pledge has strong liquidity. Therefore, the risk of credit funds is low. In addition to loan income, you can also get intermediary business income including foreign exchange settlement and exchange difference.

6. Carrying out financial services through warehouse receipt financing plays an important role in small and medium-sized enterprises, banks and third-party warehousing companies (or logistics companies), which not only helps to improve the efficiency of capital use of enterprises, but also effectively solves the problem of loans that are difficult for small and medium-sized enterprises to guarantee and mortgage, and improves the efficiency of resource allocation of banks.

7. The disadvantage is to sign an agreement, keep it separately and pay a fixed fee.