Stock Finance
What is stock finance?
Stock finance is where your stock is offered as collateral for a cash loan.
It is different to trade finance or invoice finance , as there are no confirmed purchase orders for this stock..
Our stock finance loans operate as 30 to 90-day revolving credit facilities, meaning you can borrow until you hit your agreed loan threshold. Once you’ve made a repayment, it’s available for borrowing again.
This money could be used for working capital, to pay bills, fund marketing campaigns or to purchase equipment.
Thoughts from Matt
“Stock finance is a revolving facility aimed at smaller businesses needing to hold large amounts of stock. It allows you to unlock the value of this stock, allowing you to keep your business on a firm financial footing and invest in more products.
If you have large amounts of stock, talk to us today about how we can help you use it to your advantage.“
Matt Haycox
Founder and CEO, Funding Guru
How does stock finance work?
£100k Credit Limit
Pay Supplier £50k
Repay 30-90 Days
Pay Fee / Interest
Let’s say you are a car dealership looking to use a stock finance facility to increase the inventory on your forecourt.
The funding would allow you to keep your stock levels high and your range of models interesting and competitive. This increases the appeal of the product range for customers and thereby the likelihood of sales.
Below we explain the stages of a stock finance application.
- Find the stock you wish to purchase
- Fill out an online application for a stock loan
- We make a funding decision in less than a day typically
- If agreed, we advance the money for the goods
- You regularly update us with your stock listings, so we can adjust the funding accordingly
- Once repayments have started, you can then withdraw more money through a variable line of credit
At Funding Guru, we typically loan between £100,000 and £1,000,000. Loans can be agreed within 24 hours and the money can be in your account within a couple of days.
Like any lender, we charge interest and product fees on our loans. But we are transparent on these from the start and you will not face any hidden charges.
We also don’t believe in penalising borrowers for paying back their loans early. If you are able to repay the loan earlier than expected, there are no early repayment fees.
Businesses with fast turnaround of high-value stock are most likely to be suitable for stock finance, as they have the confidence their products will sell.
But stock finance is suitable for a wide range of businesses and industries. Put simply, if you purchase stock then it can work for you.
Stock finance is an ideal solution for companies where invoice finance or factoring isn’t an option and existing suppliers won’t extend sufficient credit.
There are all sorts of products that can be bought using stock finance. At Funding Guru, we’ve loaned money to car dealerships, antique dealers, wine merchants, watch dealers and all manner of wholesalers.
Examples of products you could buy using stock finance:
- Clothing
- Vehicles
- Technology such as laptops or smartphones
- Furniture
- Art
- Antiques
With stock finance, the risk to the lender can be reduced as the assets act as security. So an impeccable credit history isn’t necessarily essential.
At Funding Guru, we take a pragmatic approach to lending – we take vision into account as well as circumstance. If you have CCJs or adverse credit this doesn’t necessarily mean you can’t get funded, so give us a call today and let’s talk.
We strive to provide a suitable finance solution for any business with a bright future.
Pros of stock finance
Below we list the main benefits of using stock finance.
Stock finance is an on-demand, revolving facility meaning you can unlock more cash as soon as you have made a repayment.
Like any lender, we charge interest and product fees on our loans. But we are transparent on these from the start and you will not face any hidden charges.
We also don’t believe in penalising borrowers for paying back their loans early. If you are able to repay the loan earlier than expected, there are no early repayment fees.
If your business has seasonal ebbs and flows – such as if you are a retailer or the strength of your sales are weather dependent – stock finance can keep your cash flow more stable.
But stock finance is suitable for a wide range of businesses and industries. Put simply, if you purchase stock then it can work for you.
Stock finance is an ideal solution for companies where invoice finance or factoring isn’t an option and existing suppliers won’t extend sufficient credit.
There are all sorts of products that can be bought using stock finance. At Funding Guru, we’ve loaned money to car dealerships, antique dealers, wine merchants, watch dealers and all manner of wholesalers.
Examples of products you could buy using stock finance:
- Clothing
- Vehicles
- Technology such as laptops or smartphones
- Furniture
- Art
- Antiques
As a business, you have full control of how you spend the loan – whether it’s buying more stock or purchasing equipment
At Funding Guru, we take a pragmatic approach to lending – we take vision into account as well as circumstance. If you have CCJs or adverse credit this doesn’t necessarily mean you can’t get funded, so give us a call today and let’s talk.
We strive to provide a suitable finance solution for any business with a bright future.
Allows you to keep on top of trends and react better to market conditions. Having a wider range of up-to-date products ultimately means more sales and bigger profit margins.
Your customers will not know you are working with a lender, so you can borrow money without having to worry about others being concerned about your financial stability.
Cons of stock finance
Like all borrowing, you should be aware of the risks that come with loaning money. These include the below.
Stock finance may be more expensive than other types of loans because there are higher upfront fees as the stock will need to be independently valued.
Because stock finance is often priced as a variable rate of interest, any increase in the Bank of England base rate may increase the interest charged on the loan.
To qualify for stock finance, you need to be a products-based business with goods that act as security for the lender. There may be other forms of business finance more suitable for your business.
If you can’t meet your lender’s terms, there is a chance they could seize the assets and leave you short on stock.
To be accepted for a stock finance, a lender will ideally want to see your business has a healthy balance sheet.
Contact Us
A stock finance facility from Funding Guru can put your business exactly where it needs to be to succeed. Contact us online or give us a call.