Every retailer strives to achieve a certain level of flexibility in its stock management cycle. A crucial aspect of this involves having a steady supply of stock to fulfil customer orders, which can be boosted in response to fluctuations in demand.
While this may seem like a given, the reality is that many UK SMEs struggle to ensure they have the working capital available to reinvest in stock and inventory purchase. This can be particularly painful when there are time-sensitive opportunities to scale up, but no funds or working capital to hand.
How stock finance can help
A stock purchase loan can free up the value tied up in the purchased stock before it is sold on to the customer. Traditional stock or inventory finance products come in the form of invoice financing, revolving credit, merchant cash advances, and even credit cards.
Stock finance for suppliers
Many B2B suppliers turn to invoice financing when looking for a source of funding to facilitate stock purchase. However, it's worth noting that suppliers may have to prove they have a large order from a reputable company before they can be considered for invoice finance.
In addition, most traditional inventory finance products, such as invoice finance or trade finance, are fee-based. As such, suppliers could find themselves paying hefty fees for this solution, even if they only need finance for a couple of months.
Stock finance for retailers
Retailers who require finance to facilitate inventory or stock purchase tend to turn to revolving credit, merchant cash advances and credit cards as opposed to invoice financing.
However, in recent years, some traditional invoice finance providers have introduced products specifically for stock finance. These products allow retailers to borrow money based on the value of their inventory or stock, in order to boost cash flow whilst the inventory is unsold. However, these products come with terms that can be quite rigid, and so many retailers find themselves turning to alternative sources of finance that provide more flexibility.
Alternatives to stock finance
It’s worth looking into applying for a small business loan to assist with stock or inventory purchase if you want to ensure you have the capital available to act upon timely or profitable growth opportunities.
One such product is the Fleximize business loan, which offers a flexible and speedy alternative to traditional inventory finance products. Crucially, Fleximize business loans can be in your account within 24 hours of application, so that you waste no time responding to changing demands and time-sensitive opportunities to invest in more stock or inventory. Here’s a summary of what we offer:
- Business loans of £5,000 – £500,000
- Unsecured and secured borrowing options
- Flexible repayment terms of 3 – 48 months
- Speedy application with minimal paperwork
- Approval and deposit in as little as 24 hours
- No hidden fees or early-repayment penalties
- Interest charged on a reducing balance, not the total loan amount
- Repayment holidays and top-ups available with all loans
- Exclusive discounts on industry-leading business services
At Fleximize, we'll work with you to ensure that your business loan is tailored to the specific needs of your SME, especially if the funds are required to facilitate a specific project or stock purchase opportunity. For example, unlike many traditional inventory finance lenders, we don't charge any overpayment or early repayment fees. This means that you won't be penalized if you grow quicker than expected and don't need the funds for as long as you initially thought.
Stock finance in practice
Alan Barrie, owner of Newbury-based Montagne Sports has come to Fleximize twice looking for quick injections of capital to allow him to take advantage of last-minute stock opportunities. In 2018, he discovered that one of his suppliers was looking to shift some stock and was offering a large quantity for a significantly discounted rate.
Spotting the opportunity to offer his customers something new and grow his business, Alan applied for a small business loan of £20,000 to take to the supplier. Thanks to Fleximize's speedy approval and deposit process, Alan was able to swiftly secure the stock at an even more discounted rate. Alan explains:
“We had an opportunity with two of our suppliers to do quite a substantial deal on some of their stock. They were looking to do a cash deal, and to shift stock quickly, so we went back to Fleximize. It made a huge difference to us as a company, and that to me is what finance is for a small company like us. It’s not about getting finance to survive, it’s about getting finance to allow take advantage of an opportunity.”
Alan Barrie used a Fleximize business loan to purchase discounted stock
Apply for stock finance
Applying for a business loan with Fleximize is a straightforward and speedy process. Simply fill out our short application form, wait 24 hours for a decision, and your loan could be deposited on the same day.
Alternatively, feel free to give us a call on 020 7100 0110 if you want to learn more about how our stock finance business loans can benefit your SME.