how hard is it to get a loan secured by "liquid" inventory?

suppose I want to open a retailer or mail order type business and buy inventory in bulk at a bargain price. Absent long history of being in business and the easy lending policies of yore, qualifying for a line of credit without collateral would probably be unlikely. Well, so is there a straightforward way to get a loan secured by the inventory itself?

Incidentally, suppose the answer is “no” because the lender is too afraid of the borrower stealing the inventory and running away. In this case, for the case of mail order businesses, why couldn’t the lender provide a secured storage facility where the mail order businesses could keep their borrowed inventory (guarded by lender’s personnel) and generally transact their business (whether just the shipping or maybe even reprocessing and other value-added work) on rented premises? That way the lender would have trusted the borrowers more. Do this sort of business arrangements exist out there?

These kinds of lenders exist.
They are called “Pawn Shops”

A bank type financial institution will loan you money based simply on the feasibility of your business plan. If it’s a no-brainer to make money, they will loan you money without collateral. If it’s so risky that they won’t, then you need a better business plan, not a more lenient lender.

Depending upon the size of the loan you are looking for, you would either want to go to the Business Banking or Middle Market lending group of a bank. Typically, inventory is a less attractive form of collateral for banks, but if you have an established business and some diversity in customers, you could probably get a loan with something like a 50% advance rate on the collateral. Accounts receivable is a much more attractive form of collateral and you could get a higher advance rate (~80%). Most loans of this type are typically hybrid type loans where both A/R and inventory are the collateral, it is structured as a revolving line of credit, and the amount of the loan is determined by a borrowing base formula based upon the value of the collateral. The borrowing base is typically determined monthly. If you find yourself on the riskier side, you may want to go to a lender that specializes in Asset Based Lending or Factoring.

This would be a massive hassle for a bank and they would usually not be interested in doing it. They may be interested in having all of the cash go through the bank (inflows and outflows). This would be an Asset Based Lending operations.

Not true. Beyond simple and small credit card type loans, you usually have to have a debt rating to get an unsecured loan.

The general term for this business model is called “floorplan financing.” It is quite common, in fact, especially among dealers of large, big-ticket items: cars, boats, farm machinery.

Lenders will typically send out examiners to make sure that serial numbers of items on the floor match the records of what has been purchased from manufacturers and sold to customers. Nevertheless, there have been some quite sophisticated cases of dealers defrauding their floorplan financiers (usually involving swapping plates and inattentive examiners).

Your second thought also is a common practice. Or at least is like one. Often, creditors of retailers will instruct the retail to have the customer make payments to a lockbox over which the creditor has control. I suspect your monitored warehouse/fulfillment center probably has also been done before as well.