Stock finance as the name would suggest is funding based on the stock you carry. If your business carries a lot of stock then the value is tied up in your warehouse. Stock Finance offers you a way to transfer some of that value into working capital.

Typically a stock finance lender will advance you up to 60% of the value of your stock. As a finance option it is only available to large businesses with a turnover in excess of £5 million operating in commodities, manufacturing, wholesale or distribution.

Ideal for:
Businesses that carry a large volume of stock at any one time and wish to realise some of that value without waiting for sale could benefit from stock finance.

Security required:
The facility is secured against the stock involved. It is often offered alongside an invoice finance facility of some kind.

Advantages:

• Allows you to free up working capital currently tied up in stock.
• You only draw down the money you need and pay interest on that money.
• Can be organised relatively quickly.

Disadvantages

• It can be expensive.
• The stock is never worth what you think it is.

Key UK providers