What is stock finance?
Do you ever find yourself in a ‘catch-22’ position?
• You have orders coming in.
• Yet you do not have the money to buy the raw materials or stock needed to fulfil the order.
Holding onto stock can also cause cash flow problems for a business.
Stock finance or Purchase Order finance may provide you with the solution you are looking for. This type of business finance can be set up:
• As a stand alone facility against a confirmed order, or if you just want to build stock for future orders
• Or as part of an asset based lending facility.
Stock finance provides businesses with headroom. It releases working capital from:
• Raw materials.
• Work in progress.
• Finished goods.
Which is otherwise held up on the balance sheet.
What types of businesses can benefit from financing stock?
Stock finance is suitable for businesses trading in the UK and internationally.
It is ideally suited to seasonal businesses and sectors including:
Finance generated by a stock finance facility can be used for funding:
• Business growth.
• Restructuring and business turnaround.
How does a stock finance facility work?
Put simply, your lender will employ a third party to value your stock. Your lender will then provide funding against the value of your stock.
For additional funding, all you need to do is provide your lender with either weekly or monthly stock listings.
Setting up a stock finance facility will not impact existing overdraft of invoice finance facilities.
Stock financing facilities can be set up as confidential or disclosed.
Benefits of financing stock for your business
A stock finance facility injects cash into your business… quickly.
The finance available is short-term and is revolving. This means a business can make repeated use of the facility as and when it requires cash.
As a result a business can take advantage of:
• Negotiating supplier discounts for prompt payment of stock.
• Purchasing seasonal stock.
• Purchasing liquidation stock.
Get the most appropriate finance for your business
Save time and money by letting us find the most cost effective business finance package for your organisation.
As a business finance broker, we have vast experience in financing stock.
Contact us now for a stock financing quotation. We would be delighted to discuss your individual business requirements further.