W

1 Waiting Period

Time during which the Securities and Exchange Commission studies a firm’s registration statement. During this time the firm may distribute a preliminary prospectus.

2 Warehousing

A warehousing method of financing can reduce the risk of using inventory as collateral to secure the loan. There are two variations of this method: field warehousing and public warehousing. [See also Field warehousing and Public warehousing]

Warehousing, like receivables financing, is a flexible source of short-term credit that automatically grows as the company’s working capital needs expand. Also, like receivables financing, its cost is fairly high. Typically, the warehousing company imposes a service charge, usually a fixed minimum plus 1 to 2 percent of the funds loaned, plus an interest rate of 8 to 12 percent or sometimes more. The fixed costs of warehousing — the minimum service charge plus the cost of providing the field warehouse facilities or moving goods to a public warehouse — make...