Merchant cash advance · Stock and inventory finance
Merchant cash advance 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 merchant cash advance works for Stock and inventory finance
A merchant cash advance can fund a stock purchase for a card-based retailer, repaying as a percentage of daily takings so the repayment tracks how quickly the stock actually sells. That alignment is genuinely useful for a seasonal buy. The cost is the issue: priced as a factor rate over a short period, the annualised equivalent typically sits well above a term loan or an overdraft. We will show that comparison plainly so the convenience is weighed against what it costs.
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
Merchant cash advance for Stock and inventory finance: the numbers
| Typical amounts | $5,000 – $300,000 |
|---|---|
| Term | 3–18 months |
| Indicative rates | 25% – 60% p.a. |
| Repayments | A set percentage of daily card settlements |
| Speed | 24–48 hours |
| 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 merchant cash advance?
A merchant cash advance is a lump-sum payment to a business in exchange for an agreed share of its future card sales. Repayment happens automatically as a percentage of each day’s takings until a fixed total, set by a factor rate, has been repaid.
What is a factor rate?
A factor rate is a multiplier applied to the amount advanced to determine the total repayable — a 1.25 factor on $50,000 means repaying $62,500. It is not an interest rate, and because the balance reduces over the term, the equivalent annual percentage rate is substantially higher.
Is a merchant cash advance regulated credit?
Merchant cash advances provided for business purposes are not consumer credit under the National Credit Code. Many providers are signatories to the Australian Finance Industry Association’s Online Small Business Lenders Code, which requires disclosure of an annualised cost figure.