Cash for stock: buy what you'll sell before the rush

You can’t sell what you don’t have. For retailers, wholesalers, online stores, hospitality venues and trades that carry parts, stock is the business. And stock has to be paid for before it earns a cent.

When do businesses need cash for stock?

• Before the busy season. Christmas, summer, back-to-school, EOFY sales, footy finals.
• For a big order. A new wholesale account or a corporate order that needs inventory upfront.
• For a new line or launch. Minimum order quantities can be large.
• When a supplier changes terms. From 30-day credit to payment upfront, overnight.
• To fix a stock-out. Empty shelves cost sales and customers.

How much should you spend on stock?

Spend on what you’ll realistically sell, not on what you’d love to sell. A quick method:

1. Last year’s sales for the same period, by product line if you have it.
2. Adjust for what’s changed: new products, price changes, a new channel.
3. Check what was left over last time, and how much had to be discounted.
4. Allow for lead time. When must you pay the supplier to have stock on the shelf in time?

Item	What to check
Supplier lead time	Weeks from order to delivery
Payment terms	Deposit, upfront, or on delivery
Sell-through	How many weeks to sell most of it
Customer payment	Cash and card (fast) or invoice terms (slow)
Leftover plan	Clearance, returns, or carry into next season

Business Victoria and business.gov.au both warn against holding too much stock and suggest clearing slow-moving lines. That’s even more important when the stock is funded.

Stock order due before the season starts? Tell us the amount and the date and we’ll match the funding to your selling season.

How should repayments work?

The ideal stock funding is repaid as the stock sells:

• Short-term cash loan. A lump sum for one seasonal buy, with a term that ends after the peak.
• Business cash line. Draw for each reorder, repay as it sells, draw again. Great for year-round stock cycles. See business cash line.
• Property-backed cash. For very large orders, with interest prepaid or added so there’s nothing to repay until the season has paid off.

Avoid heavy repayments that start before the stock has had a chance to sell.

What about bulk deals and discounts?

Sometimes the best reason to fund stock is a deal: a supplier clearing a warehouse, a price rise you can beat, or a bulk discount. Those need a quick decision and a calculation that the discount beats the cost of funding. We cover it on cash to grab a supplier deal.

Imported stock: allow for the extra weeks

If you buy from overseas, the cash need starts earlier and lasts longer than for local stock:

Stage	Cash impact
Order and deposit	Often a deposit at order, balance before shipping
Shipping	Several weeks at sea or in transit
Customs, GST on imports and freight	Paid when goods arrive
Warehouse to shelf	Unpacking, pricing, listing online
Selling and getting paid	Your normal sell-through period

Plan funding to cover the whole chain, not just the supplier invoice. Freight and landing costs can surprise first-time importers, and stock held at the wharf earns nothing.

Watch your stock turn

Stock turn is how many times a year you sell through your average stock. It’s the best single number for judging whether funded stock is working. If a line used to sell through in eight weeks and now takes sixteen, that’s cash sitting on a shelf. Before you fund the next order, check which lines are moving and which aren’t, and put the money where it turns fastest.

Stock and growth

If you’re buying more stock because sales are growing, you may have a bigger cash gap than just this order. Our page on the growth cash gap explains why.

An illustrative example

Illustrative only. A Fremantle surf and swim retailer needs $65k of summer stock ordered by early September for delivery in October. Last year it sold most of its summer range by late January. A short-term unsecured loan funds the order, with repayments starting in November once summer trade picks up, and the loan is cleared by February.

Fill the shelves, keep the cash

Running out of stock in your busiest weeks is the most expensive kind of saving. Tell us what you need to buy and when. It takes about 60 seconds, there’s no credit check to ask, and your details aren’t scattered to a crowd of lenders. A real person looks at your turnover and stock cycle and gives you a call.

Please be accurate about the order size, supplier deadline and your monthly takings. It lets us match repayments to your season.

Fund my stock order →