Business overdraft · Stock and inventory finance
Business overdraft for Stock and inventory finance
Stock and inventory finance is funding used to buy goods for resale ahead of the season or contract that will sell them, repaid from the sales proceeds rather than from existing working capital.
How a business overdraft works for Stock and inventory finance
An overdraft on the trading account is the least complicated way to fund fluctuating stock levels: the account simply goes below zero as inventory is bought and back up as it sells. Bank overdrafts are typically the cheapest revolving option, though slower to arrange and usually requiring security and full financials. For an established wholesaler or retailer with a bank relationship, an overdraft sized to the seasonal swing is often better value than any alternative facility.
The cash-flow pattern we plan around
Cash committed to inventory two to four months before the selling season, with proceeds arriving across the season itself and slow-moving lines tying up capital longer.
What stock and inventory finance typically fund
- Seasonal stock ahead of a peak trading period
- Supplier deposits and shipment balances on imports
- Volume buys to secure a better unit price
- Inventory for a new contract or product line
Business overdraft for Stock and inventory finance: the numbers
| Typical amounts | $10,000 – $500,000 |
|---|---|
| Term | 12–12 months |
| Indicative rates | 8.5% – 19.5% p.a. |
| Repayments | No set repayment — deposits reduce the overdrawn balance |
| Speed | 3–10 business days depending on security |
| Documents stock and inventory finance usually need | ABN, GST registration and 6–12 months of bank statements · Purchase orders or supplier proforma invoices · Stock turn and sales history for the relevant lines |
Rates shown are indicative ranges observed across our lender panel for the period stated. They are not an offer or quote. Your rate depends on your business, the lender, the amount, the term and the security offered. The lender makes the final credit decision.
Key terms
Inventory finance
Inventory finance is short-term funding used to purchase goods for resale, repaid as the stock sells, and sized against expected sell-through rather than against the total value a supplier is willing to ship.
Stock turn
Stock turn is how many times inventory is sold and replaced over a period, and it determines how long a finance facility must run before the goods it funded have generated the cash to repay it.
What is a business overdraft?
A business overdraft is a revolving credit limit attached to a business transaction account. The account can be overdrawn up to the approved limit, interest is charged daily on the overdrawn balance, and deposits automatically reduce what you owe.
How much does a business overdraft cost?
Overdrafts typically carry an interest rate on the overdrawn balance plus an annual line fee of about 1–3% of the limit and a one-off establishment fee. Because line fees apply whether or not you draw, the effective cost depends heavily on utilisation.
Is a business overdraft secured or unsecured?
Both exist. Secured overdrafts are backed by property or a general security agreement and carry lower rates and larger limits; unsecured overdrafts rely on trading performance and a director’s guarantee, and are usually capped well below $250,000.