What is Work in Process (WIP) Financing?
Work in Process or WIP Financing (not to be confused with work in progress, a term used in construction or the building trade) is the portion of your inventory that is being “worked”. Because of its unsalable condition, most lenders value WIP inventory lower than raw or finished (salable) inventory. Production Financing describes the same.
Audio Definition/Pronunciation
OTHER TERMS BEGINNING WITH "W"
- Workers’ Compensation
A type of business insurance that provides benefits to employees who suffer work-related injuries or illnesses. Specifically, this insurance helps pay for medical care, wages from lost work time and more. Workers’ Compensation premiums are calculated according to risk factors…
- Working Capital
Working capital is a fundamental concept in financial management that represents the difference between a company's current assets and its current liabilities. It measures a company's short-term liquidity and ability to meet its day-to-day operational expenses and short-term financial obligations.…
- Working Capital Requirement (WCR)
Working Capital Requirement (WCR), also known as the net working capital requirement, is the amount of funds a business needs to finance its day-to-day operations, such as purchasing inventory, paying wages, and covering other short-term expenses. It represents the difference…