Funding stock purchases: which option fits your business?

Stock is cash sitting on a shelf. When it sells quickly, it’s the best investment a business can make. When it sits, it’s money you can’t use for anything else. Funding stock well is all about the space between those two outcomes.

Whether you run a shop, an online store, a wholesaler or a workshop that buys materials in bulk, this page helps you work out which funding suits which stock decision.

How quickly does your stock turn into cash?

Before choosing funding, work out your stock cycle:

1. Order to arrival. How long from paying the supplier to having goods ready to sell? Local orders might take days; imports can take months.
2. Arrival to sale. How long do goods typically sit before selling?
3. Sale to cash. For shops, almost instant. For wholesale, it could be 30 to 60 days.

Add those together and you have the number of days your cash is tied up. That number drives everything else.

Which funding fits which stock need?

Stock need	Tends to suit	Why
Regular restocking	Line of credit	Draw on each reorder; repay as goods sell
Peak-season order	Short loan or line of credit	Repaid through the peak
Bulk-buy discount	Short loan	Only if the saving beats the funding cost
Large import order	Longer loan or property-secured	Long lead times slow the payback
A new product line	Carefully sized loan	Test demand with a smaller order first

Trading businesses can access unsecured options, typically $5,000 to $500,000, sized on turnover and bank statements. For bigger orders, property-secured loans run from $20,000 to $5,000,000.

How do you test whether a stock buy will pay off?

A quick coaching check before any funded stock purchase:

• Realistic sell-through. What percentage will sell at full price, and by when? Use last year’s numbers, not hopes.
• Margin after funding. Gross profit on the stock, minus the cost of the funding, minus storage and freight.
• Leftovers plan. What happens to what doesn’t sell?
• Timing. Will the cash come back before the repayments squeeze you?

If the maths only works in the best case, buy less. If it works comfortably in a normal case, funding can help you capture sales you’d otherwise miss.

When you’ve done the sums, a real person can help you find the right structure — about a minute to enquire, no credit check at that stage.

Are bulk-buy discounts worth borrowing for?

Suppliers love to offer a better price for a bigger order. Sometimes it’s a genuine win; sometimes it’s a trap. Work through it in dollars:

1. How much do you save per unit, and in total?
2. How much longer will the extra stock sit before selling?
3. What does funding that extra stock cost in total, including fees?
4. What does storing it cost?
5. What’s the risk it dates, spoils or goes out of fashion?

If the saving is clearly bigger than the costs and risks, go for it. If it’s close, the smaller order is usually wiser.

What do lenders look at for stock funding?

• Bank statements showing how sales flow through your account, ideally across a peak.
• Supplier quotes or purchase orders.
• Stock turn, if you know it — it shows you manage stock well.
• Lodgements up to date.
• Property details, for larger orders.

Our business health check explains stock turn alongside the other numbers worth knowing.

An illustrative example

Illustrative only. An outdoor gear retailer sells most of its camping range between October and January. Last year it sold out of several lines by early December. This year the owner wants to order about 40% more of those lines in August, paying the supplier before the goods ship.

The funding plan ranks a line of credit first, drawn in August and repaid from December and January sales. It suggests increasing only the lines that sold out, not the whole range, and flags last year’s December bank statements as good evidence of seasonal demand.

What should you have ready?

• Supplier quotes or purchase orders
• Photo ID and ABN (plus ACN if you trade through a company)
• Last six months of business bank statements, ideally including a peak
• BAS lodged and up to date
• Last year’s sales for the same period, if you have them
• Property details if you’re offering security

How do supplier terms change what you need?

The best stock funding is often the funding you don’t need. If a supplier gives you 60 days to pay and the stock sells within 45, your customers are effectively funding it. Ask existing suppliers for longer terms as your order history grows, consider splitting large orders into staged deliveries, and compare the cost of a supplier discount for early payment against funding the stock yourself. Even a couple of weeks’ extra terms can shrink your funding need noticeably.

Stocking up? Let’s match the funding to your sales

The best stock decisions are made with a clear view of when the cash comes back. We’ll help you find funding that fits your stock cycle, and we’ll be honest if a smaller order looks wiser.

Enquiring takes about 60 seconds with no credit check. We don’t blast your details to a list of lenders; a real person reads what you’ve shared and calls you. Accurate answers — especially the order size, timing and your monthly deposits — mean we can match you properly first time.

Check what you could qualify for →