In today's competitive landscape, optimizing working capital is not just a financial goal—it's a competitive imperative. A vast amount of capital is tied up in inventory, and Inventory Capital Solutions (ICS) by FDC offers an advanced, data-driven approach that fundamentally changes how your business operates by unlocking the power of third-party inventory financing.
The conventional model—where purchased inventory remains a costly, capital-consuming asset on your balance sheet—is replaced by the ICS transformation. By utilizing advanced demand forecasting and proprietary risk algorithms, ICS analyzes every stocked item to create a "risk-balanced inventory investment portfolio." This initial step often frees up substantial "lazy capital" tied up in excess stock.
The true innovation lies in the software’s ability to use its asset quality risk models to partition your low-risk stock, reclassifying a significant portion as "investment grade" assets. This reclassification is the key to establishing a Special Purpose Vehicle (SPV) that purchases and owns this investment-grade inventory. Your company can then receive this stock as "consignment stock" until it is sold.
This innovative structure provides powerful financial benefits:
Off-Balance Sheet De-recognition: Investment-grade inventory can be de-recognized from your company’s balance sheet, improving financial ratios and freeing up capital for other investments.
No-Recourse Financing: The financing is structured as "no-recourse," meaning your business is not financially responsible for the inventory if it doesn't sell.
Reduced Risk: It offers a "bankruptcy remote" solution and eliminates the requirement for future purchase commitments, providing greater flexibility and security.
While FDC is a software provider and not a bank, we work with your financial partners to provide the advanced risk intelligence necessary to establish and manage this unique financing model. ICS is more than just management software; it is a strategic tool that enables a new paradigm in financing, allowing your business to free up significant working capital, strengthen its financial standing, and gain a powerful competitive advantage.