Industry guide
Business finance for retail
Retailers buy stock months before they sell it and take most of their profit in a handful of weeks. Finance in retail is nearly always about funding that mismatch.
Retail finance is lending sized to daily takings and seasonal stock cycles, covering inventory buys ahead of peak trade, store fit-outs and the working capital that carries a shop through quiet months.
The classic Australian retail year loads inventory purchasing into September and October for a Christmas trade that delivers a disproportionate share of annual revenue, followed by a January and February trough where rent and wages continue at full rate. Fashion runs on two seasons with the same shape. Any retailer who has watched a supplier deposit fall due in August knows the problem is timing, not profitability, and lenders who understand retail will look at merchant statements rather than just the P&L.
Card takings make retail unusually easy to assess and to lend against. Daily settlement data gives a lender a live view of trade, which is why merchant cash advances and daily-repayment loans are common in this sector. They are convenient and fast, and they can be expensive — a factor rate that looks small over a short term can annualise into a very high number. We compare the total cost of any daily product against a conventional term loan before recommending it, and we say plainly when the cheaper option is worth the extra week of paperwork.
The cash-flow pattern we plan around
Daily card takings with heavy seasonal peaks, against stock commitments and supplier deposits made two to four months ahead of the selling season.
What retail typically fund
- Seasonal stock and supplier deposits
- Store fit-out and refurbishment
- POS, security and back-of-house systems
- Rent and wages through quiet months
- Opening a second location
Documents lenders usually ask retail for
- ABN and lease or licence for the premises
- 6 months of bank statements and merchant statements
- Supplier quotes or purchase orders for stock
Finance options for retail
Unsecured business loan for retail
A term loan taken in August and repaid across the Christmas trade is the cleanest way to fund a seasonal stock buy. You know the amount, the repayment and the end date, which makes it easy to test against your own sales forecast.
Merchant cash advance for retail
A merchant cash advance takes a fixed percentage of daily card settlements until an agreed total is repaid, so repayments shrink automatically when trade is quiet. For a retailer that is genuinely useful in February.
Business line of credit for retail
A revolving limit suits retailers who reorder continuously rather than in one big seasonal buy. Draw when a supplier invoice falls due, repay as the stock sells, keep the headroom for the next order.
Fit-out finance for retail
Shopfitting is expensive and largely non-recoverable — joinery, lighting, flooring and signage that belong to the premises rather than to you. Fit-out finance spreads that cost across the lease term instead of clearing your cash reserves before you have traded a day.
Trade finance for retail
Retailers importing directly — homewares, apparel, furniture — face supplier deposits at order and balance at shipment, months before the goods hit the floor. Trade finance pays the supplier at those points and gives you 90 to 120 days to sell through.
Equipment loan for retail
Retail equipment is unglamorous but essential: POS terminals, security and camera systems, display refrigeration, racking and back-of-house handling gear. An equipment loan funds these against the assets themselves at rates well below unsecured lending, and bundles several small purchases into one facility.
Assets we finance for retail
Lenders active in this space
Prospa, OnDeck, Moneytech, Shift — among others on our panel of 18+. Your broker checks fit before anything is submitted.
Key terms
Retail inventory finance
Retail inventory finance is short-term funding used to buy stock ahead of a selling season, repaid from the sales that stock generates rather than from existing cash reserves.
Merchant statement assessment
Merchant statement assessment is a lending approach that sizes a facility against daily card settlement data, allowing a retailer to be assessed on current trade rather than on a year-old set of financials.