Stock finance

Stock finance is funding secured against inventory, either stock you already hold or stock you need to buy. The lender advances a proportion of the stock's assessed value and takes security over it. As the stock sells, the facility reduces and can usually be redrawn against new stock. It is also called inventory finance, inventory funding or stock funding.

There is no difference. They are two names for the same product. "Stock" is the usual British term and "inventory" the usual American one, and UK lenders use both. You may also see stock funding, inventory lending or inventory financing, all describing the same arrangement.

Broadly, stock a third party would readily buy. Standard, branded, commodity and non-perishable goods with an established resale market work best. Lenders look at turnover rate, shelf life, storage conditions and how specialised the goods are. Bespoke items made for one customer, perishable food, and anything with a fast-moving fashion or technology cycle are much harder to fund, because a forced sale would recover little.

Advance rates across the UK market typically run from 50% to 80% of the assessed wholesale or cost value of eligible stock, with higher occasionally available on very saleable inventory. The assessment is deliberately conservative: it is based on what the goods would realistically fetch in a forced sale, not what you paid and not what you expect to sell them for. Standard, fast-moving goods attract a higher advance than specialised stock. These are indicative market ranges as at August 2026, not a quote. We set out what each lender will actually advance before you commit.

Usually yes, and often more than once. Stock is a moving asset, so lenders reconcile the facility against actual stock levels periodically and may send a valuer or auditor to the warehouse. Budget for this: inspection and audit costs are a normal part of stock finance pricing and are easy to overlook when comparing headline rates.

A field audit is a lender-appointed inspection of your stock and stock records, carried out at your premises. The auditor checks that the goods exist in the quantities reported, that they are in the stated condition, and that your stock system reconciles to reality. It protects the lender's security on an asset that changes constantly. The cost is usually charged to the borrower.

Yes, and it is a natural pairing that funds the full working capital cycle. Stock finance covers goods on the shelf, then invoice finance covers the invoice once those goods are sold on credit terms. The two lenders need to agree their security positions, because both want a claim over your assets. Raise it early and we will structure the introductions accordingly.

Often yes. Even though the facility is secured on the stock, lenders frequently ask directors for a personal guarantee as well, because stock can deteriorate, disappear or prove worth far less than expected in a distressed sale. We flag the guarantee requirement on each lender we shortlist.

It depends far more on what you hold than on how big you are. A small business with a warehouse of standard, saleable goods can be a better fit than a larger one holding specialised stock. Where inventory is light, a revolving credit facility or a business loan is usually simpler and cheaper.

You still owe the facility, and the finance charges keep accruing while the stock sits. This is the main risk of the product and the reason lenders scrutinise turnover rates so closely. Stock finance suits goods you are confident will move. It is a poor way to fund a bet on demand that may not arrive.

UK limited companies, LLPs and PLCs. It suits wholesalers, distributors, retailers, importers and manufacturers holding stock with a genuine resale market.

Commercial stock finance provided to limited companies for business purposes is typically unregulated. FundingLinks works only on unregulated commercial finance for UK businesses.