Quick answer
Inventory finance lets an online store buy stock now and repay it as that stock sells. For Australian e-commerce businesses it usually means an unsecured loan or line of credit sized on turnover and bank statements, typically $5,000 to $500,000, or a property-secured loan from $20,000 for larger or newer businesses. The key test is sell-through: will the stock turn into cash before repayments bite?
Key points
- Stock loans work when sell-through is predictable and margins cover the cost of finance.
- Unsecured options are usually sized on recent turnover and bank statements; property-secured options can go larger.
- Match the repayment shape to how fast the stock sells, not to a generic loan term.
- Lenders like to see landed cost, lead times and a reorder plan, not just a supplier invoice.
- Unsecured / line of credit
- Typically $5k – $500k
- Property-secured
- $20k – $5m
- Main evidence
- Bank statements, turnover, stock plan
- Credit check to enquire
- None
Stock is the most cash-hungry thing an online store does. You pay for it weeks or months before a customer pays you, and if it sells slower than planned, that cash sits on a shelf. Inventory finance bridges that gap. Used well, it lets you order in the right quantities, at the right time, without pausing your ads or draining the account you need for everything else.
What does inventory finance actually pay for?
In practice, “inventory finance” for a young Australian store covers any funding used to buy or bring in stock. Common uses include:
- A bigger reorder of a proven best-seller so you stop selling out every fortnight.
- A minimum order quantity from a new manufacturer that’s larger than you’d normally buy.
- A seasonal buy ahead of end of financial year sales, Black Friday or Christmas.
- Landed costs on top of the goods themselves: freight, customs brokerage, duty and GST on imports.
- Packaging and inserts bought in bulk to bring the per-unit cost down.
That last point on landed cost matters more than most founders expect. Goods imported into Australia above $1,000 generally need a formal import declaration, and most attract GST at the border, plus possible duty and other charges, according to business.gov.au. If you only borrow for the supplier invoice, the freight and border costs arrive later and squeeze your cash anyway.
How do lenders size a stock loan for an online store?
There’s no single formula, but the questions tend to be the same.
| What they look at | Why it matters |
|---|---|
| Monthly turnover and its trend | Shows the business can carry a repayment |
| Business bank statements | The main evidence of real trading for unsecured lending |
| Gross margin after landed cost | Tells them whether stock actually makes money |
| How fast stock sells | Slow-turning stock ties up cash for longer |
| Existing debts and repayments | Stacked facilities can crowd out a new one |
| Property equity (if any) | Opens a secured option for larger or newer businesses |
For unsecured and line-of-credit options, amounts are typically $5,000 to $500,000 and sized on turnover and statements. Property-secured business loans run from $20,000 to $5,000,000 and can suit businesses whose trading history is still short, or where the amount is larger than cash flow alone supports.
If you want to test your numbers before you enquire, the ad-spend payback calculator shows how a funding amount splits between stock and ads, and whether the stock side can keep up with the customers your campaigns bring in.
Line of credit or lump sum: which shape fits your stock?
Most stock funding comes in one of two shapes.
A line of credit gives you a limit to draw against. You pull funds when a reorder is due, then pay it back down as orders come in. It suits stores that reorder often, in smaller amounts, and want flexibility. The discipline required is treating the limit as a stock tool, not a spare wallet.
A lump-sum loan pays out once and is repaid over a set term. It suits a single big purchase: a first production run, a large seasonal buy or a container of goods. The risk to manage is the mismatch between a fixed repayment schedule and stock that may sell faster or slower than planned.
A simple rule: match the repayment shape to the sell-through. If your stock turns in six weeks, a short, flexible facility probably fits better than a long fixed loan. If you’re buying a year’s supply of a slow, high-margin product, a longer term may make more sense. Our guide to the cash conversion cycle for online stores walks through how to measure that turn.
What should I have ready before asking?
You’ll get a faster, clearer answer if you can show:
- The purchase itself. A pro forma invoice, purchase order or quote from your supplier.
- Landed cost per unit. Goods, freight, brokerage, duty and GST.
- Recent sales by product. Especially for the lines you’re reordering.
- Six months or so of business bank statements. If sales run through a personal account, say so on the form; it changes how the lender reads things.
- Your reorder plan. When the stock lands, how long it takes to sell, and when the next order is due.
Ready to see what your store might qualify for? Start a 60-second enquiry. It doesn’t involve a credit check.
Illustrative example: a skincare store’s first big reorder
Illustrative only — not a real business. A two-person skincare brand sells about 700 units a month of its hero serum and keeps selling out. Its manufacturer offers a better unit price at a 5,000-unit minimum, which works out to about $38,000 landed. The business has eight months of steady statements through a business account, but only $12,000 spare cash.
Buying 5,000 units is roughly seven months of stock. The founders test two options: a smaller unsecured facility to fund the order, repaid from monthly contribution, or a line of credit they draw down for this order and future ones. Because the product is proven and sells evenly, the lender’s main questions are margin after landed cost and whether repayments fit comfortably inside the monthly contribution. The founders also check that the order won’t leave them unable to fund their ads, which would slow the very sales they’re relying on.
Common mistakes with stock funding
- Borrowing for the invoice but not the landed cost. Freight, duty and border GST catch people out.
- Funding slow movers. Stock that sells in a year shouldn’t be funded like stock that sells in six weeks.
- Starving the ads. If all the money goes into stock, there may be nothing left to sell it with.
- Ignoring the GST line. A growth spurt can push GST turnover past $75,000, and the ATO expects registration within 21 days. The GST milestone page explains what changes.
See if your store qualifies for stock funding
If your best-sellers keep running out, or a supplier’s minimum order is the thing holding you back, it’s worth a proper conversation. Tell us about the order in about a minute. Enquiring is free of any credit check, your details go to one specialist rather than a line-up of lenders, and a real person will call to work through the numbers with you. Please answer the form carefully, particularly monthly revenue, time trading and whether you own property, so the first option we put in front of you is the one that fits. You might also find the line of credit for online sellers page useful if you reorder often.
Frequently asked questions
Can I get inventory finance with no trading history?
Unsecured stock funding usually needs a track record the lender can read, often at least several months of business bank statements. If you're newer and own property with equity, a property-secured business loan can be an option because the security carries more of the weight.
Is a line of credit or a lump-sum loan better for stock?
A line of credit suits frequent, smaller reorders because you draw what you need and pay it down as stock sells. A lump sum suits one large order, such as a factory run or a seasonal buy, where you know the amount and timing up front.
Will a lender take my stock as security?
Some specialist lenders do, but for most young online stores the lending is either unsecured, sized on cash flow, or secured on property. Stock is hard for a lender to value and sell, so it rarely carries a loan on its own.
How much stock funding can my store support?
It depends on turnover, margins, existing debts and how steady your bank statements look. A useful self-test is whether the monthly repayment could be met from the contribution the stock generates, even if it sells more slowly than planned.
Do I need to show my supplier invoices?
Often, yes. A pro forma invoice or purchase order shows exactly what the money buys. Pair it with your landed cost and expected sell-through and the conversation goes much faster.