Funding bulk stock and supplier payments

When stock ties up the cash

For retailers, wholesalers, importers and manufacturers, cash flows into stock long before it flows back as sales. A seasonal business may need to buy most of its year’s stock in a few months. An importer pays before goods leave the port. A wholesaler is offered a discount for a large order paid upfront. Each of these can be profitable, but only if the business can fund the purchase.

Why property security beats stock finance alone

Trade finance and inventory facilities lend against the goods themselves, often at modest advance rates and with detailed monitoring. Unsecured working capital is sized on turnover and repaid daily or weekly. A property-secured loan is different: it relies on a home, investment property or premises, so it can be larger, has no daily deductions and can be repaid as the stock sells.

Funding type	Typical limitation
Supplier credit	Limited terms, may be withdrawn
Trade or inventory finance	Advance limited to a share of stock value, monitoring required
Unsecured working capital	Sized on turnover, frequent repayments
Property-secured loan	Sized on equity and exit; interest prepaid or capitalised

Capturing discounts

Suppliers often offer meaningful discounts for early payment or volume. Illustrative only: if a supplier offers a discount for paying a large order upfront, and the cost of a few months of secured funding is less than that discount, borrowing to pay early improves margins. Run the numbers with your own quotes. The bridging cost estimator totals the funding cost to compare against the discount.

Compare a stock loan against your supplier’s terms with a specialist.

Sizing for the whole cycle

Include everything between ordering and selling:

• the stock itself
• freight, insurance and storage
• customs duty and GST on importation where applicable
• currency movements on overseas orders
• marketing to sell the stock
• a buffer for slower sales

Exit and term

The exit is the sale of the stock. Set the term to the expected sell-through period plus a buffer, using last season’s sales as a guide. If the stock sells faster, many loans can be repaid early; check the terms. If it sells slower, the loan can stay in place, but a backup exit, such as a property sale or refinance, protects you if the season disappoints. See seasonal cash flow and secured loans.

An illustrative stock loan

Illustrative only. A camping and outdoor retailer places its main order for spring and summer in winter, when trading is slowest. Its supplier offers better pricing for payment before shipment. A caveat loan over the owners’ investment unit funds the order, freight and GST on importation, with interest prepaid for six months. Stock arrives in early spring, sells through the season, and the owners repay the loan in February from the summer’s takings.

Clearing overdue supplier accounts

When suppliers put a business on stop credit, it cannot restock, which makes the cash problem worse. Clearing overdue balances with a secured loan can restore normal terms. Combine this with a conversation with the supplier about future terms and the business’s recovery plan.

Managing slow-moving stock

Not all stock sells as planned. Track sell-through weekly against your plan, and decide early what to do with lines that lag: discount, bundle, return to the supplier where possible, or hold for next season. The earlier you act, the less the slow stock costs you, and the easier it is to keep the loan on track.

Stock and the balance sheet

Large stock purchases can make a balance sheet look strained at year end, which matters if the exit is a bank refinance. Time the refinance application for when stock has been converted to cash and receivables have been collected. Your accountant can help you present the seasonal pattern clearly to a bank, so the cycle is understood rather than mistaken for a cash problem.

Imports and currency

Importers face extra timing risk: goods are paid for before shipping, spend weeks at sea and then clear customs, where GST on importation and any duty must be paid before release. Currency can move between order and payment. Build each of these into the amount and the term so the loan covers the full journey from factory to shelf.

Using the supplier relationship

A supplier that is paid early and reliably becomes a better partner: priority allocation in tight seasons, better terms on the next order and more flexibility when things go wrong. Funding a large order properly can strengthen that relationship in ways that last well beyond the loan itself. Ask your supplier what it values most, whether earlier payment, larger minimum orders or longer commitments, and use the funding to offer the thing that earns the best terms in return.

Stock up without running dry

Good stock decisions shouldn’t be limited by the timing of cash. Tell us what you are buying, when it will sell, the property you can offer and your supplier’s terms, and a specialist will tell you whether a secured loan makes sense. There is no credit check when you first enquire, your details are handled by one team, and last season’s sales figures help us set a realistic term. Talk about stock funding.