See which lenders will give you the best inventory finance. Instant online results.
This is a totally free process and will not affect your credit rating.
Borrow from $5,000 to $500,000
Fixed or variable interest rates
Repayments to suit your budget
Terms from 1 month to 5 years
Secured & unsecured options
Own a business and have an ABN
Business is GST-registered
Permanent Citizenship or Residency
Minimum business-operating time of six months
Can provide business bank statements
Inventory finance is a category of business loan products used to purchase business inventory or stock.
Inventory loans can allow a business to borrow up to a specified portion of its inventory value, and often use the purchased inventory as collateral on the loan.
Inventory finance functions in a similar way to most business loans, except that the loan amount is secured by unsold stock or inventory:
A business applies for inventory finance with a suitable lender
The lender assesses the finance application to determine if the business qualifies
The lender agrees to finance up to a certain value of the business’s current stock (~80%)
The business and the lender agree to the finance terms and conditions
The business receives the funds from the lender
The business makes regular repayments until both the principal amount and any interest charges are repaid.
This can be an incredibly useful form of finance for businesses which have large quantities of unsold stock in a warehouse and need to access cash flow for their business, such as:
Retail stores and shops
Cafe and restaurant businesses
The loan is secured by the unsold stock to allow borrowers to access lower rates and better deals than through unsecured business finance.
A secured inventory finance agreement also presents a lower risk to lenders, allowing borrowers with imperfect credit scores to access finance.
Any business can use inventory finance, though the clear candidates are businesses which operate by selling a product, and have reserves of inventory and stock that are unsold.
Stock and inventory can be completed products, self-assembly products, or simply parts for existing products. Inventory finance can also be used by manufacturing businesses, which make and then sell on the parts to other businesses in the supply line.
Inventory finance is commonly used when:
Payment schedules between suppliers, your business, and customers, is insufficient to effectively manage your inventory levels.
You need to access finance to secure a limited-time offer on discounted inventory from a supplier.
Cash flow is allowing you to trade as normal, but you need to finance additional stock to meet the demand for times of the year when sales spike.
Regular demand for your products is increasingly high and you need to secure large amounts of stock you hadn’t accounted for.
The business is growing and you need to expand your product line or develop a new product.
You can use the Money.com.au smart form to compare loan offers from real Australian lenders, and apply directly for inventory finance online with a number of specialist lenders.
Type of Business: Wholesale
Loan Amount: $20,000
Case: A wholesale business has been operating for three years and has identified a spike in sales between March and April for a particular product.
The business has previously sold the majority of the stock but has been unable to further advertise during this period at the risk of selling out entirely and disappointing customers.
Based on this reliable trading pattern and projected revenue over this period, the business owner chooses to apply for inventory finance up to $20,000, to secure additional stock and additionally market their business during this time.
The business presents this to the lender, who finances the amount to purchase additional inventory and market the business. The business combines its increased stock and increased exposure to achieve the same sales pattern with much greater revenue.
The business owner is then able to repay the lender early, saving on fees and interest charges, while still securing a healthy increase in available cash flow for the remainder of the year.
Qualifying for inventory finance is relatively simple. Most lenders will be able to provide options if you:
Have been trading for at least 12 months; and
Have an ABN; and
Are registered for GST; and
Have a clean credit history; and
Own property or can provide a 20% deposit
Although the process will be a little more involved, if you don’t meet the above criteria you can still get approved if you:
Are self-employed or a sole trader
Have been trading for between 6 - 12 months
Have an imperfect credit history
Do not own property
There are two main types of applications, which will depend on the amount you wish to borrow. If you are borrowing less than $100,000 the approval process will be fairly simple.
Most times, just your business bank statements will be sufficient to illustrate your monthly business revenue.
If you wish to borrow more than $100,000, your lender will require additional documentation to assess your application.
If this is the case, you’ll need to provide additional documentation to the lender so they can better assess your application. Here are some tips to improve your chances of getting approved.
If you are borrowing less than $100,000:
Proof of identity
An ABN and GST registration
An acceptable credit rating — the lender will ask to conduct a credit check
Business bank statements
Trust Deed if the business is held in a trust
Australian Tax Office (ATO) Portal access.
If you are borrowing more than $100,000:
All the documentation provided if borrowing less than $100,000; and
Financial records (provided by your accountant)
Profit and Loss Statements
If you are making an application for more than $100,000, you can speak to your bank or a lender directly to discuss your financial circumstances and need for finance.
If you are applying for less than $100,000, you can generally apply online with a number of different specialist business loan lenders, including those who provide loans designed specifically for inventory finance.
Lenders will assess an application based on the monthly revenue of the business, its intended use for the loan, how the loan will benefit future business revenue, and more.
Each lender will have different approval criteria, but here are some tips to improve your chances of getting approved.
Demonstrate an ability to service your business loan or lease.
Meet the lender's criteria for acceptable credit rating
Meet the lender's criteria for minimum turnover and maximum debt
Provide profit and loss statements and your business balance sheet
Provide details of the asset you wish to purchase
Provide read-only access to your business bank statements
Provide a personal guarantee by the director of the company
As inventory finance is determined by the strength of your previous trading history and value of your unsold stock, you will generally need to provide a lender with:
An accurate, up-to-date list of your unsold stock and inventory.
Business records that illustrate the value and frequency of your sales.
A realistic sales forecast which illustrates how you plan to successfully repay the lender.
Inventory finance is a type of business finance used to purchase inventory or stock. It allows a business to borrow a specific amount of its current stock value, which is then also used as security on the loan amount.
You can use an inventory loan to buy stock, or for any other business purpose.
It enables you to leverage your inventory to give you access to vital cash flow for your business and, due to the security required, is often easier to access than unsecured business finance.