Inventory Funding for Real Estate Developers.
A completed project with unsold units ties up capital a developer would rather redeploy into the next opportunity. Inventory funding unlocks that value against the ready stock itself, on terms that reflect its saleability rather than the original construction cost.
Unsold Stock · Sales-Linked Repayment · Construction Loan Takeout
Where This Becomes Relevant
- A project is complete or near-complete with a meaningful share of units still unsold.
- The developer wants to redeploy capital into a new land parcel or project rather than wait for gradual sales.
- An existing construction facility needs to be taken out now that the project has moved from construction risk to sales risk.
- OC or possession has been received, making the units legally ready to mortgage and sell.
What Lenders Evaluate
- Marketability of the Unsold Stock — unit mix, pricing versus the micro-market, and realistic time-to-sell.
- OC/Possession Status — whether the units are legally ready to be mortgaged and sold.
- Existing Debt Position — what needs to be repaid or subordinated on the project before a new facility can be secured against the same units.
- Sales Track Record — the developer's historical absorption rate, which shapes how conservatively the lender values the unsold stock.
How the Financing Is Approached
Inventory funding is sized against a conservative loan-to-value on the unsold units' realistic sale value, not the original construction cost. It's commonly structured with sales-linked repayment, so each unit sold triggers a proportionate prepayment, and the facility naturally winds down as inventory clears. Where an existing construction loan is still outstanding, inventory funding is often structured specifically to take that facility out, converting construction-stage debt into inventory-stage debt with a security and pricing profile that better matches the risk at this point in the project.
What EquiFin Does
Inventory Valuation Review — assessing the unsold stock's realistic saleable value and time-to-sell.
Existing Debt Coordination — structuring the facility to take out or subordinate existing construction debt where relevant.
Repayment Structuring — setting up sales-linked prepayment so the facility winds down as inventory sells.
Lender Fit — matching the requirement to capital providers comfortable with inventory-stage risk.
Why EquiFin
- We value unsold stock conservatively against realistic sale timelines, not optimistic projections.
- We coordinate directly with existing lenders when the facility is structured as a takeout.
- We structure repayment to wind down naturally as inventory clears.
- One point of contact from structuring through to disbursement.
Frequently Asked Questions
What is inventory funding in real estate?
Inventory funding is debt raised against a developer's unsold, ready or near-ready units, allowing the developer to unlock capital tied up in completed stock rather than waiting for it to sell gradually. It's typically secured by a mortgage on the specific unsold units being financed.
How is inventory funding different from last-mile funding?
Last-mile funding covers the remaining construction cost to finish a project that's close to completion. Inventory funding comes after that — against units that are already built and ready for sale but haven't sold yet. One funds finishing the building; the other funds the wait for buyers.
Can inventory funding be used to repay an existing construction loan?
Yes, this is a common use — once a project is complete and carries unsold stock, inventory funding is often used to take out or partially repay the construction facility, converting a construction-stage loan into one secured against completed, saleable inventory.
See what documents lenders typically ask for — Documents Required for a Corporate Loan →
Capital Tied Up in Unsold Stock Is Capital Not Working for Your Next Project.
Inventory funding unlocks that value while sales continue at their own pace.
Discuss an Inventory Funding Requirement