Warehouse Financing - Definition
Written by Jason Gordon
Updated at December 20th, 2020
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Warehouse Financing Definition
Warehouse financing is a form of financing in which manufacturers take loans using their goods or commodities as collateral for the loan. The collateral is held in trust, that is, a third party who is the trustee in the financial arrangement holds the goods on behalf of the lender. In most cases, an agent can be in control of the collateral or the collateral will be kept in warehouses that the lending institution approves. However, as the name implies, collaterals in warehouse financing are kept in a warehouse, these are non-perishable commodities and goods that the manufacturer uses as collateral for the loan taken.
A Little More on What is Warehouse Financing
Shortage of funds to run a business is that every business owner avoid, there are many ways of financing a business, one of which is a loan. Warehouse financing is used by manufacturers to secure loans with favorable loan terms and repayment plan. There are many benefits that borrowers, who are mostly producers and manufacturers can derive from warehouse financing. The major benefit of warehouse financing is the ability of borrowers to use their commodity, raw materials and other goods as collateral for the loan. This type of financing is a secured loan that is cost-effective, unlike other forms of loan. Also, the terms of a warehouse financing are flexible and always favorable to the borrower, small businesses and manufactures leverage on this type of loan.
References for Warehouse Financing
- https://www.investopedia.com/terms/w/warehouse-financing.asp
- https://investinganswers.com/dictionary/w/warehouse-financing
- www.businessdictionary.com/definition/warehouse-financing.html
Academic Research on Warehouse Financing
Risk Analysis and Measurement in Warehouse Financing, Yin, Y., Luo, Z., & Fei, Y. (2009, October). Risk Analysis and Measurement in Warehouse Financing. In 2009 IEEE International Conference on e-Business Engineering (pp. 469-474). IEEE. Research on Optimal Decision of Bank's Outsourcing in Warehouse Financing [J], LI, J., XU, Y., & FENG, G. Z. (2007). Research on Optimal Decision of Bank's Outsourcing in Warehouse Financing [J]. Operations Research and Management Science, 2. An Optimal Decision Study on Staged Ioaning in Warehouse Financing [J], LI, J., XU, Y., FENG, G. Z., & LI, Y. X. (2007). An Optimal Decision Study on Staged Ioaning in Warehouse Financing [J]. Operations Research and Management Science, 1. Supply chain coordination in confirming warehouse financing, Lin, Q., Su, X., & Peng, Y. (2018). Supply chain coordination in confirming warehouse financing. Computers & Industrial Engineering, 118, 104-111. The business model and risk control of warehouse financing in China, Gengzhong, F., Yang, Y., Wenyan, Z., & Simiao, W. (2004, September). The business model and risk control of warehouse financing in China. In IEEE International Conference on E-Commerce Technology for Dynamic E-Business (pp. 58-65). IEEE. Warehouse Financing Risk Analysis for SMEs in China, Luo, Z., Wong, E., Tan, C. J., Tong, F., & Ying, Y. (2010, May). Warehouse Financing Risk Analysis for SMEs in China. In 2010 International Conference on Service Sciences (pp. 43-48). IEEE. Research on the e-business logistics service mode based on branch storage and warehouse financing, Jiang, J., Jin, Y., & Dong, C. Y. (2016). Research on the e-business logistics service mode based on branch storage and warehouse financing. International Journal of Services Technology and Management, 22(3-5), 203-217. [CITATION] Warehouse Financing for Small and Medium-Sized Enterprises Based on Supply Chains [J], Dingti, L., Peipei, Z., & Deqiang, Z. (2009). Warehouse Financing for Small and Medium-Sized Enterprises Based on Supply Chains [J]. Journal of Hunan University of Technology, 4. Analysis of Warehouse Financing Business Based on the Game Theory, SUN, Y., & WANG, W. F. (2010). Analysis of Warehouse Financing Business Based on the Game Theory. Journal of Shanxi Finance and Tax College, (6), 06. Warehouse Financing Risk Analysis and Measurement with Case Study in Carbon Trading, Yin, Y., & Luo, Z. (2013). Warehouse Financing Risk Analysis and Measurement with Case Study in Carbon Trading. In Small and Medium Enterprises: Concepts, Methodologies, Tools, and Applications (pp. 1064-1088). IGI Global.