Quick answer
Cash for stock lets a business pay suppliers before the goods sell. The key is to order against realistic sales and to schedule repayment around the selling window. Trading businesses can typically reach $5,000 to $500,000 unsecured, and for smaller sums funding on the same day is sometimes possible when deadlines are tight.
Key points
- Stock is cash on a shelf until it sells and is paid for.
- Order against likely sales, not the dream scenario.
- Lead times decide when the money is needed.
- Let repayments follow the selling season.
- Unsecured
- Typically $5k – $500k
- Speed
- Same day possible, smaller sums
- Repaid from
- Sales of the stock
- Enquiry
- No credit check to ask
A stocked shelf makes money. An empty one loses it twice: the sale you missed, and the customer who learned to shop elsewhere. The awkward part is timing. Suppliers want paying weeks before anything sells, and those weeks are exactly when your cash is thinnest.
Why stock is a cash-flow problem, not just a buying decision
Every dollar spent on inventory leaves your account on day one and returns, with margin, only when the item sells and the customer pays. For a business that buys heavily ahead of a peak, there might be two or three months where the money is sitting in boxes. That is when a gap opens, even though the plan is sound.
When businesses fund stock
- Ahead of Christmas, the summer holidays or the school-holiday rush
- To meet a large wholesale or corporate order that needs inventory first
- To launch a new line, when minimum order quantities are big
- When a supplier tightens terms, moving from 30-day accounts to payment up front
- To recover from a stock-out that is costing sales
Sizing the buy
An order based on hope is expensive. Try this instead:
- Pull last year’s sales for the same weeks, by product line if possible.
- Adjust: new products, price changes, extra marketing, a lost customer.
- Note what was left over, and what you had to mark down.
- Count back from the selling date by the supplier’s lead time. That’s when the money must leave.
| Question | Why it matters |
|---|---|
| How long until goods arrive? | Sets the date cash is needed |
| Deposit or full payment up front? | Changes the size of the first outlay |
| How many weeks to sell most of it? | Sets the repayment window |
| Do customers pay at the till or on account? | Decides how fast cash returns |
| What happens to leftovers? | Prevents a second cash trap |
Holding too much slow-moving stock is a classic way for profitable businesses to run dry.
Stock order due before the season starts? Tell us the amount and the date.
Matching funding to the selling cycle
The funding should be gone shortly after the stock has sold.
- Short-term loan. A lump sum for one buy, with repayments starting as sales build. See short-term business loans.
- Cash line. Draw for each reorder, repay as it sells and draw again. Best for year-round stock cycles. See the business cash line.
- Property-backed money. For a very large order, sometimes structured so little is due before the season pays off.
Avoid facilities that demand heavy repayments before a single item has sold.
The imported-stock chain
Many New Zealand retailers import. The cash needed is earlier and lasts longer than for local product:
| Stage | Cash effect |
|---|---|
| Order | Often a deposit, with the balance due before shipping |
| Sea or air freight | Weeks in transit |
| Arrival | Freight, border charges and import GST due on landing |
| Warehouse to shelf | Unpacking, pricing, listing |
| Selling and collecting | Your normal sell-through period |
Funding should cover the entire chain, not just the supplier’s invoice. Import GST is paid up front and recovered later through your return, so arrival-day cash is larger than the price tag suggests. Exchange rates also drift between order and payment.
Watch the turn
Stock turn, how often you sell through your average inventory in a year, is the clearest gauge of whether stock money is working. If a line that used to sell in eight weeks now takes sixteen, cash is idling. Before funding the next order, put money behind products that move and ease off the rest.
Link to growth
If you are ordering more because sales are climbing, the real gap may be larger than one order. Our page on the growth cash gap explains why growth swallows cash.
An illustrative example
Illustrative only. A swimwear and surf shop at Mount Maunganui must order $65k of summer ranges by early September for October delivery. Last year most of it sold by late January. A short-term unsecured loan pays for the order, repayments start in November as the beach crowds arrive, and the facility is gone by February.
Next step
Don’t let an empty shelf cost you the season. Give us the amount, the supplier deadline and your normal takings. A real person reads your enquiry and rings you. It takes about a minute, asking involves no credit check, and your details are not shopped around.
Plain figures for the order size, deadline and weekly takings let us line repayments up with your season.
Frequently asked questions
Is borrowing for inventory common?
Very. Retailers, wholesalers, online stores and cafés all pay suppliers before they sell. Lenders focus on turnover, statements and how quickly your stock usually moves.
How do I decide how much to order?
Start from sales in the same weeks last year, adjust for anything that has changed and look at what was left over afterwards. Over-ordering ties up cash and forces discounts later.
A loan or a cash line for stock?
One seasonal order points to a short-term loan. Frequent reorders through the year point to a line you draw and repay as stock sells.
Can the supplier be paid directly?
Normally the money goes to your account and you pay the supplier. For overseas suppliers, allow time for currency conversion and bank transfers.