Trade finance · Stock and inventory finance
Trade finance 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 trade finance works for Stock and inventory finance
Trade finance is purpose-built for imported stock. The facility pays the supplier at deposit and shipment and gives you a term of 90 to 150 days to receive, sell and collect, which covers the whole cycle for most importers. It effectively converts a supplier demanding payment up front into one offering generous terms. Facilities revolve as goods are sold and new orders placed. Include freight, duty and GST in the funded amount rather than paying those from cash on arrival.
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
Trade finance for Stock and inventory finance: the numbers
| Typical amounts | $50,000 – $5,000,000 |
|---|---|
| Term | 2–6 months |
| Indicative rates | 9% – 20% p.a. |
| Repayments | Each drawdown repaid in full at the end of its term |
| Speed | 1–3 weeks to establish, then 24–48 hours per drawdown |
| 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 trade finance?
Trade finance is short-term funding that pays a supplier for goods at the point of order or shipment, with the borrower repaying the financier once the goods are sold. It is typically a revolving limit with drawdown periods of 60 to 180 days.
What is a letter of credit?
A letter of credit is a bank undertaking to pay an overseas supplier once specified shipping documents are presented. It gives the supplier payment certainty and gives the buyer assurance that payment only happens when the shipment is properly documented.
Trade finance vs invoice finance
Trade finance funds stock before you sell it; invoice finance funds the receivable after you have invoiced. Importers frequently run both, so the facility covers the full cycle from purchase order to customer payment.