Fast funding for stock and inventory

Why stock is often a speed decision

Stock opportunities don’t wait. A supplier offers a discount if you pay by Friday. A container of product lands and needs clearing. A major customer places an order twice the usual size. Christmas, Easter, back-to-school or harvest is coming and the shelves need filling before the rush, not during it.

In each case, the cash has to leave the business well before the sales come back in. Fast stock funding bridges that gap so the opportunity isn’t lost while you wait for the bank.

Matching the funding to the stock cycle

Stock situation	Suggested pathway	Why
Seasonal build-up every year	Line of credit	Draw before the season, repay as it sells
One-off bulk-buy discount	Unsecured loan	Short term, repaid from the margin
Very large order or container	Fast secured business loan	Supports amounts beyond turnover
Stock for a signed contract	Loan sized to the contract	Repaid from the contract payments

The rule of thumb: repay stock funding from the sale of that stock. If the stock takes six months to sell, a three-month loan will create a new problem.

Is the discount worth the cost of finance?

This is where a quick calculation pays off. Say a supplier offers a meaningful discount for paying upfront on a bulk order. The value of that discount in dollars can be compared directly with the total cost of the finance in dollars — fees plus interest over the time it takes to sell through. If the discount is larger, fast funding is making you money.

The loan cost calculator lets you enter an offer’s fees and total interest, and the dollar value of what the funding achieves, to see the net result. No rates are assumed; you use the numbers you’ve actually been quoted.

What lenders want to see

• The supplier quote, invoice or purchase order.
• Bank statements that show your normal sales pattern.
• How fast the stock usually turns — a rough sell-through period is fine.
• Any customer orders already placed for the stock.
• Photo ID for directors, and property documents if you’re using security.

For a straightforward unsecured stock loan with strong statements, same-day funding is possible for smaller amounts. If a deadline is close, send the details now and include the supplier’s payment date.

Tax and records to keep in mind

Stock bought and on hand at the end of the income year is generally accounted for as trading stock, so talk to your accountant about how a large pre-30 June purchase will be treated. The ATO notes that if the value of your trading stock changes by $5,000 or less over the year, you may not need to do a formal stocktake — but a large seasonal purchase can easily move it beyond that. Keep supplier invoices, delivery records and payment confirmations together; they help both at tax time and when a lender asks for evidence of purpose.

Mistakes that make stock funding expensive

• Buying too much. A discount on stock that sits for a year is not a saving.
• Funding slow movers with short money. Repayments arrive before sales do.
• Ignoring freight, duty and storage. Imported stock costs more than the invoice. See wholesale and import finance.
• Leaving it too late. Stock funding sought the week before a peak is under pressure; sought a month before, it’s a choice.

An illustrative example

A Gold Coast surf retailer usually builds stock through October and November for summer. This year a supplier offers a larger discount for a single upfront order paid by mid-October. The business uses a line of credit to pay the order, sells through the range between December and February, and repays the facility from summer takings. The discount comfortably exceeds the cost of the funds. Illustrative only.

How to size a stock facility

Work backwards from the sales you expect, not forwards from the stock you’d like. A simple approach:

1. Estimate sales for the period the stock is meant to cover — last year’s figures for the same months are a good start.
2. Convert to a buy figure using your normal margin.
3. Subtract stock already on hand and anything a supplier will give you on terms.
4. Add freight, duty and storage if the stock is imported or bulky.
5. Add a modest buffer for a reorder mid-season.

The result is the amount to fund, and the sales timeline tells you the term. If the number is larger than your turnover supports unsecured, that’s when property security or a staged approach — part now, part mid-season — makes sense.

Stock funding by business type

• Retailers and online stores typically fund seasonal peaks and new ranges. A line of credit that’s drawn in spring and cleared after Christmas is a common pattern. See retail and ecommerce.
• Wholesalers and importers fund containers and bulk orders with longer lead times, where freight and duty add to the cost.
• Trades and construction fund materials for specific jobs, ideally repaid from the job’s progress payments.
• Hospitality venues fund stock mainly in small, frequent amounts — usually better handled by a facility than a loan.

Fill the shelves before the rush

If the stock is ready and the sales are coming, finance shouldn’t be what holds you back. There’s no credit check to enquire, your details aren’t handed on to a crowd of lenders, and a real person looks at your stock cycle before recommending a structure. Give us an accurate order size, turnover and timing on the form, and we can tell you quickly what’s realistic. See if you qualify.