Retail finance for stock, refits and peak trade

Retail business finance is mainly about timing: paying for stock before it sells and keeping the business funded through slower weeks. Money comes in daily, but the big costs arrive in lumps.

Rent, often payable quarterly in advance, business rates, payroll and stock orders each run to their own timetable. A retailer can be profitable over the year and still have weeks when outgoings exceed takings.

Margins depend on how quickly stock turns. Slow-moving lines tie up cash and may need discounting, which is why lenders look at stock levels as well as sales.

• Buying stock ahead of a peak: stock finance can pay suppliers for seasonal or bulk orders, with repayment as the goods sell.
• Smoothing quieter weeks: a merchant cash advance is repaid as a share of card takings, so repayments fall when sales do.
• Refits and new stores: unsecured business loans give fixed repayments for shopfitting, décor and opening costs.
• Tills, EPOS, shelving and displays: equipment leasing spreads the cost and can make upgrades easier.
• The VAT bill after your busiest quarter: VAT loans spread a large payment over several months.
• General cash pressure: working capital loans can cover rent, rates or payroll.

Illustrative example only: actual costs depend on the lender and your circumstances. A retail company orders £30,000 of seasonal stock in September. A stock finance provider pays the supplier, and the company repays £31,500 over four months, or £7,875 a month, as the stock sells. The £1,500 difference is the cost of the finance.

Lenders want to see steady sales, sensible stock levels and a business that can keep trading from its stores. They often weigh recent trading more heavily than older accounts.

• Card and online sales trends over recent months
• Stock turn and the age of the stock you hold
• Gross margin and how much stock is sold at a discount
• Lease terms and how long is left on each store lease
• How each store performs if you trade from more than one
• Existing finance, including any advances still being repaid

• Filed accounts and up-to-date management accounts
• Business bank statements and card terminal or payment provider statements
• A current stock valuation and stock ageing report
• Supplier invoices and terms for the stock you want to fund
• Sales split by store and by channel
• Quotes for any refit, shopfront or equipment

• Plan peak buying early and arrange finance before you place orders.
• Set money aside for the VAT bill that follows your busiest quarter.
• Clear slow-moving stock before the next big buy, so cash is not tied up twice.
• Avoid using short-term, card-based finance for long-term projects such as a refit.
• Keep online and in-store takings visible in business accounts, so lenders see the full picture.

We are a commercial finance broker, not a lender. We help established limited companies, LLPs and partnerships of four or more partners in retail find suitable lenders on our panel.

Every client has a dedicated relationship manager, a real person available by phone, email and chat from first enquiry until the lender pays out. They will help you match each need, from stock to refits, to a product that suits it.

We do not charge you a fee. The lender pays us a commission when the finance completes, and you can ask how much it is. Commission can differ between lenders. You can check your eligibility in about 60 seconds without affecting your credit score. Lenders run their own credit checks later, if you choose to apply, and make their own decisions.

Can I get finance if we sell online and in store?

Yes, many lenders consider both. Card-based finance may only count sales through certain terminals or payment providers, so check how online sales are treated. Our e-commerce finance page covers online-led businesses.

Can stock finance pay overseas suppliers?

Some providers will pay suppliers abroad, often in the supplier's currency. Exchange rates and currency charges then form part of the cost, so ask how they are calculated.

Can a retail company with a weaker year still apply?

Often, yes. Some lenders focus on recent card takings and current trading, while others want profitable filed accounts. Lenders make their own decisions, and your relationship manager can explain which may fit.

How long does retail finance take to arrange?

It varies. Card-based advances and some unsecured loans can move quickly once documents are in, while stock and asset finance usually take longer because suppliers and goods need checking.