Higher consumer spending levels could create greater need for retail inventory financing

As U.S. consumers continue to see improvement in their personal financial situations, spending may pick up, which could lead to increased demand for retail inventory financing among small- and medium-sized businesses. 

Should Americans spend more at retailers, stock will need to be replenished, which can be difficult for smaller businesses to do on their own. Fortunately, asset-based lending is available for financial assistance if needed. 

Economists surveyed by Bloomberg project that spending increased 0.3 percent in July, following a 0.5 percent bump in the previous month. With rising home sales and prices as well as a budding jobs market, the source noted many businesses are seeing an increase in transactions. 

"We're seeing a little more weight from the consumer and the housing sector," Michael Brown, economist at Wells Fargo Securities LLC, told Bloomberg. 

With retail sales rising for a fourth consecutive month in July, according to the U.S. Department of Commerce, many businesses may already have a need for inventory financing, which will only grow with further increases in consumer spending. 

"We're seeing sales pick up in multiple categories – that's a promising sign that consumer spending might be a little bit stronger in the third quarter," Brown told the source. 

Asset-based lending can be a great place to turn to for small businesses that need financial assistance, as traditional lenders often turn them away due to limited available capital or poor credit. 

Using current product as collateral, small- and medium-sized retailers can utilize inventory financing to obtain a revolving line of credit, which, in turn, can provide funds that allow them to keep shelves full. Growing small businesses can benefit greatly from asset-based lending as it doesn't require them to tie up any available capital.