What happens when you can pay for inventory after you sell it?
Paying for inventory months before you fully sell it creates a constant strain on cash.
It forces tradeoffs between inventory and growth.
But when you pay for your inventory after you sell it, you free up cash you can invest back into growth.
We call this Cycle-Matched Funding.
Elephant Herd Capital’s inventory financing was born from our frustration with trying to help scaling brands get the capital they needed in the form that worked for their business.
How much growth does your capital enable?
A simple question which can be hard to answer.
You need enough capital to fuel your needs and growth.
You don’t want a single shot of capital. You need sustained cash over a long time.
You need your capital to grow with your needs.
Your capital can’t become a drag on cash. You can’t have repaying what you borrowed in the past become a blocker of growth in the future.
You must generate higher returns than the cost of borrowing.
Elephant Herd Capital Inventory Finance works differently
Asset-Based Loans (ABLs): Fund a fraction of product costs and provide capital only for what is already in the warehouse.
Short-Term Lenders: Require aggressive repayments long before inventory is sold. This forces a debt-stacking spiral, where you borrow from tomorrow to pay for yesterday. Repayments chew up cash blocking future growth. It’s difficult to get high enough credit limits to cover your needs. And it’s hard to know if the returns you generate are greater than the cost.
Long Term Loans: Are one time cash injections. Once you use the cash, you are blocked from more unless you refinance. Bullet structures create refinancing risk where you are betting your business will be able to borrow more 3 to 5 years in the future.
Factors: Fund just what you can sell to credit-worthy retailers. Unless all your sales are to highly rated large retailers, you don’t get nearly enough capital.
Benefits for Brands
Fully fund inventory invoices.
Increase cash balances. Invest excess cash in advertising.
Cycle-Matched Funding. Pay for your inventory after you sell it. Cash is always on hand. You don’t need to reserve for lumpy weekly or monthly repayments.
6 Month Funding Commitments. Plan with confidence.
Partner Helping Drive Your Success. We work with you to make you more capital efficient. This reduces your cost of funds over time. This combined with your ability to acquire more customers reduces our risk which means we can lower the cost of borrowing over time.
Administrative Simplicity: By maintaining connections to your key platforms, we offload reporting requirements and work seamlessly with your existing finance function.
Scale: $5M – $25M in annual revenue.
Loyalty: Demonstrated product-market fit with high repeat purchase rates and pricing power.
Rigor: A professionalized finance function or a partnership with an established Fractional CFO.
History: 2+ years of operating sales history.
Selection Criteria
Learn more
partnerships@elephantherdcapital.com
The Partnership:
Operational Alpha
Our goal is to build long-term relationships with exceptional brands.
We don’t just deploy capital; we work alongside your finance team to reduce risk, reduce the needs for outside capital and increase capital efficiency and maximize your Return on Invested Capital (ROIC). This increases your long term value.
By aligning interests and delivering outcomes we want to earn the right to continue deploying capital into your exceptional brand.