Since the Great Recession, Americans have shown great concern about their personal financial situations. However, financial worry among consumers has fallen markedly, which could be a good sign for the future of consumer spending.
With consumers less worried about finances, retail sales might pick up in the near future, which would be a welcome sign to small- and medium-sized retailers. Should this occur, these businesses might need to utilize inventory financing to keep their shelves stocked, as retailers of this size often don't have the resources to do so on their own.
According to Gallup, Americans' financial worry in 2013 is the lowest since before the recession. Slightly more than half of consumers are classified as highly or moderately worried about their finances, down from last year's peak of 61 percent and the lowest since 2007.
There is still some way to go before financial worry eases to pre-recession levels though, as the share of consumers who were highly or moderately worried averaged 44 percent between 2001 and 2007, but the decline is still a good sign.
Retailers could certainly use an increase in consumer spending, as sales have been sluggish, falling 0.4 percent in March, according to the U.S. Department of Commerce.
Should easing financial concerns lead to higher retail sales, these companies might have a need to replenish inventory. If unable to do so on their own, and banks turn them away, inventory financing could be utilized.
This type of asset-based lending allows small- to medium-sized retailers to use current inventory as collateral to obtain a revolving line of credit, which can be used to keep shelves stocked. If sales remain depressed, this form of lending could also help retailers get through a period where cash flow might be lagging.