Stocking Finance

What is Stocking Finance?

Stocking finance, also known as stock funding or unit stocking, is a facility given to dealerships relating to its vehicle stock. As opposed to other finance, it is specifically designed for dealerships buying and selling vehicles.

The primary purpose of stock finance is to release cash tied up in stock and increase the number of vehicles on a dealership’s forecourt to increase revenue and profits.

Stocking finance can be in respect of vehicles, cars, vans, lorries, HGVs, trucks, agricultural vehicles, and other vehicles.

Advantages of stocking finance

Some of the advantages of using stocking finance are:

Increased inventory levels

One of the main benefits of stocking finance for companies is that it enables businesses to increase their inventory levels without tying up their cash flow. By accessing stocking finance, businesses can purchase larger quantities of inventory and hold it for longer periods of time, without worrying about the impact on their cash flow.

Improved cash flow

Stocking finance can also improve cash flow for companies. By using stocking finance, businesses can hold on to their cash reserves and use the facility to fund inventory purchases. This enables businesses to free up their cash flow and use it for other business operations, such as marketing, advertising, or expanding their product range.

Competitive advantage

Stocking finance can also give companies a competitive advantage. By having access to stocking finance, businesses can increase their inventory levels and offer customers a wider range of products. This can help businesses stand out from competitors and attract new customers.

Cost savings

Another benefit of stocking finance for companies is cost savings. By purchasing inventory in bulk, businesses can take advantage of volume discounts and save money on purchasing costs. This can help businesses improve their profit margins and increase their overall revenue.

Flexibility

Finally, stocking finance offers companies flexibility. This type of financing is typically short-term, which means that businesses can use it for specific inventory purchases and repay the loan once the inventory is sold. This enables businesses to manage their cash flow more effectively and avoid long-term debt.

 The process of stocking finance

• Before making an application you should get together a full set of your latest filed financial statements, together with any available up to date MI and your current stocklist.
• As a business owner you will normally be required to offer a personal guarantee so you should also be ready to submit details of your personal financial situation.
• Once you apply, the chosen provider will review all of the information submitted and run credit checks on the business and the business owners.
• To qualify for credit facilities, the dealership needs to have good credit history to demonstrate to the funder that a new credit line is appropriate and help them assess the size of facility. Low credit scores and some adverse marks on a credit history won’t always prevent an individual from obtaining a facility, but it will limit the amount of capital a lender is willing to give to a particular dealer and at what rate.

How to apply for stocking finance

MAF Finance Group can compare finance offerings from a wide panel of lenders to find the best option for you.

If you would like to get a quote or need further information, simply fill in the form and we will contact you. If you want to speak to someone directly, you can call us on 0115 958 6872 and a member of our team will be happy to speak to you. Alternatively, email us at [email protected].