Field Warehouse Receipt Loans | Inventory Financing | Short Term Financing | Corporate Finance
Under a field, warehouse financing agreement inventories used as collateral are separated from the firm’s other inventories and placed under the control of third-party field warehousing. Under this arrangement, a field warehousing company sets off a designated storage area on the borrower’s premises for the inventory pledged as collateral. The field warehousing company has sole access to this area and is supposed to maintain strict control over it.
Field warehouse receipt lending is particularly appropriate when a borrower must make frequent use of inventory. Because of the need to pay the field warehousing company’s expenses, the cost of this method of financing can be relatively high.