Question 1

How does stock finance work for retail businesses?

Accepted Answer

Stock finance provides funding against your inventory value, typically 40-60% of eligible stock. This can be a standalone facility or combined with invoice finance. Lenders will assess stock types, turnover rates, and storage arrangements. Perishable or fashion goods may have different advance rates than stable inventory.

Question 2

Can I get finance to purchase stock from overseas suppliers?

Accepted Answer

Yes, trade finance and import facilities help bridge the gap between paying suppliers (often upfront for overseas orders) and receiving payment from customers. Letters of credit, import loans, and supplier payment facilities are all available for retailers importing goods.

Question 3

What's the difference between factoring and invoice discounting for retail?

Accepted Answer

With factoring, the finance provider manages your credit control and collects payments directly from customers. With invoice discounting, you retain control of customer relationships and collections. Many retail businesses prefer confidential invoice discounting to maintain customer relationships.

Question 4

How quickly can I access funds from invoice finance?

Accepted Answer

Once a facility is in place, you can typically access funds within 24 hours of invoicing. Most facilities operate online, allowing you to submit invoices and draw funds same-day. This speed is crucial for retail businesses managing tight cash cycles.

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