Conditions for consumers have been improving in the past couple of months, which could lead to increased spending at retailers.
When sales levels pick up, small- to medium-sized businesses might run into the need to replenish stock, however, this can be difficult to do on their own due to limited available resources. If turned away by a bank, inventory financing could help.
One of the factors that has been pushing household wealth is rising home prices, which increased 10.2 percent in the first quarter of the year, according to the CoreLogic Case-Shiller Indexes. This was the first double-digit gain since the peak of the housing bubble.
"Record levels of affordability, a slowly improving job market, and very small inventories of new and existing homes for sale will continue to drive U.S. home price appreciation during the summer," said David Stiff, chief economist for CoreLogic Case-Shiller.
The improving employment situation has also helped benefit consumers. July proved to be another strong month, with the unemployment rate falling to 7.4 percent as the economy added 162,000 jobs, according to the Bureau of Labor Statistics.
Should consumers continue to see favorable conditions, spending at retailers could increase in the coming months. If this translates into higher sales levels, inventory financing demand may pick up.
With product coming off the shelves, small- and medium-sized retailers will need to be able to restock. However, not all businesses have the ability to do so and keep a healthy amount of inventory on hand. Luckily, asset-based lending is available, as inventory financing enables retailers to use current product as collateral to obtain a revolving line of credit, which can then be used to purchase additional product to ensure shelves are never empty.