Work-in-Process Financing
Capital advanced against partially completed inventory still on the production floor, used by manufacturers with long build cycles and high in-process value.
Why it is rare and valuable
Most lenders avoid WIP because it is difficult to liquidate. Specialized manufacturing lenders will advance against it, typically at 20 to 40 percent of cost, when the production process is well-documented and orders are pre-sold.
For custom and contract manufacturers, WIP financing can free meaningful working capital that would otherwise sit idle on the floor for weeks.
Related Entries
See how this structure is used in practice.
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