Stock Finance

The funding service of Stock Finance is provided by specialist funders in order to allow businesses to acquire goods on credit. Often this allows businesses to acquire more goods, beyond existing credit lines.

How does it work?

You negotiate terms of trade and delivery with your supplier. Minimum stock purchase is £20,000. Our funder then pays the supplier in line with your agreed terms. This can be payment up front before goods are released if required.

Our funder will then give you 120 days (4 months credit) from payment of supplier, before you have to pay them. So for example, if your supplier gives 60 days to our funder, you won't have to pay the funder for 180 days!

By which time you may well have turned the stock around and invoiced the product to your customer. In many cases (especially if you use the facility in conjunction with an Invoice Discounting facility) you will be able to make profit without parting with any cash !!

What are the benefits?

  • Acquire stock when it suits you
  • Allows unscheduled orders to be funded
  • Seasonal stock requirements can be funded
  • Better terms and discounts can be negotiated
  • Can be used in addition to other borrowing facilities
  • Allows for opportunistic purchases
  • Typically no security or directors guarantees required
  • No legal fees to pay
  • No annual renewal fees

How much does it cost?

You pay for funds in use, typically at 1% per month, but this can often be offset by supplier discounts received for early payment.

What type of companies qualify?

Most industries and most goods (other than perishable stock) are suitable. Minimum criteria is as follows:

  • Established at least 3 years
  • Annual Turnover in excess of £3million
  • Net Profit in excess of £50,000
  • Shareholders Funds in excess of £50,000
  • More than 10 Employees

Use the facility as a sales aid for your products

If your customers are requesting extended credit terms from you, then this product may be suitable for them.

You would then be able to offer an early settlement discount for early payment, your customer would get their extended credit terms and you would eliminate the credit risk.

Contact Sterling Capital Reserve regarding you Commercial Finance requirements