Stock Finance UK: Inventory-Backed Working Capital
By Joshua Giles, Founder and Director · Reviewed by the CoreFi credit team
Last updated 20 July 2026
CoreFi is a broker, not a lender. We do not set rates and lenders make all credit decisions.
In short: Stock finance is a revolving facility that advances a percentage of your inventory value, typically 50 to 70% of cost price, so you can buy stock without tying up cash. You draw to purchase, repay as stock sells, and the limit resets. The inventory is the security, so it is at risk if repayments are not maintained. We are a broker and place these facilities with specialist asset-based lenders.
Stock finance is a revolving credit facility secured against your inventory. The lender advances a percentage of your stock value, typically 50 to 70% of cost price, and the line moves with the stock: you draw down to buy, you repay as goods sell, and the available balance resets automatically. It is not a term loan you clear on a fixed schedule, it is a working capital line that breathes with your trading.
The reason businesses reach for it is the classic inventory squeeze. A seasonal retailer building stock for Q4, a wholesaler taking a bulk shipment to earn a supplier discount, a manufacturer holding raw materials before a production run: in each case cash goes out weeks or months before it comes back through sales. Stock finance funds that build, so you are not choosing between buying enough and keeping the bank balance healthy. Because interest accrues only on what you have drawn, a facility that sits mostly unused in quiet periods costs you very little.
The advance rate is the number that matters, and it is driven by what your stock actually is. Finished, branded, non-perishable goods with a clear resale market attract the higher advances. Raw materials, work in progress, bespoke or made-to-order items, and anything perishable or seasonal that has missed its window get discounted or excluded, because the lender is asking how cleanly it could sell the stock if it had to. Valuation is on cost price, not the price you sell at, and lenders run periodic stock audits to keep the facility honest.
One point to be clear about: the stock is the security. If repayments are not maintained, the lender can recover the inventory to clear the debt, so the asset is genuinely at risk. The lenders who fund this well are specialist asset-based lenders and trade finance houses rather than high street banks, which find stock hard to value and harder to liquidate. Stock finance also pairs naturally with invoice finance, one covering the buy side, the other the receivable, and with trade finance on the import leg. We are a broker, not a lender, so we cannot set your advance rate; we take your stock profile to the lenders who actually fund your category.
Key Benefits
- Advance rates of 50 to 70% against stock at cost free up working capital that would otherwise be locked in your warehouse, without a charge over your property
- The facility revolves as you trade: draw to buy, repay as you sell, redraw for the next order, with no fresh application each cycle
- Interest accrues only on the drawn balance, so a facility that sits idle through a quiet season costs you next to nothing
- Lenders can flex your limit ahead of a seasonal peak if you give notice and a credible stock plan, so a Q4 build does not leave you short
- The stock is the security, so a business with no commercial property to charge can still access meaningful working capital, though the inventory is at risk if repayments are not maintained
Frequently Asked Questions
What advance rate will I get against my stock?
The market norm is 50 to 70% of stock value at cost. Where you land depends on what the stock is: non-perishable, easily resaleable finished goods attract the higher end, while raw materials, work in progress, seasonal or bespoke lines are discounted or excluded. As a broker we cannot set the advance rate; the lender decides it after reviewing your stock composition and how fast it turns.
What types of stock are eligible?
Non-perishable, identifiable, saleable goods work best: finished consumer products, branded items and industrial components are typical. Perishables, made-to-order or bespoke stock, hazardous materials and anything highly seasonal are usually excluded or attract a much lower advance. Some lenders include work in progress or goods in transit, but at a lower rate and with more documentation. Tell us your stock mix and we will match it to lenders with appetite for it.
How is stock finance different from a business loan or overdraft?
An overdraft or term loan is underwritten against your whole business and gives you a general pot of cash. Stock finance is secured specifically on your inventory and revolves with it, so the facility grows as you hold more stock and shrinks as you sell. That link to real assets often lets a lender support more borrowing than an unsecured line would, but it also means the stock is at risk if you default.
Can e-commerce or imported stock be funded?
Yes. Stock held in your own warehouse or a third-party fulfilment centre can be funded, and some lenders include imported goods once they arrive at your premises and can be inspected. Amazon FBA stock is the hard case, because Amazon controls the goods and will not grant a lender security over them; a few providers work around it, but at lower advance rates. If you are funding the import itself before delivery, trade finance is the better fit.
What happens if I cannot keep up the repayments?
Because the facility is secured on your inventory, missing repayments can lead the lender to recover the stock to clear the outstanding balance, so the asset is genuinely at risk. That is the trade-off for borrowing against an asset rather than on an unsecured basis. A clean stock-management system and honest reporting protect your facility, and problems usually surface at audit, so it is always better to talk to the lender early if trading slows.
Related Funding Options
Stock Finance for Retailers | Inventory Funding UK
Stock finance for UK retailers: a revolving credit facility advanced against inventory at cost, typically 50-70% advance rate. We place these deals for high street & e-commerce businesses.
Stock Finance for Wholesalers
Stock finance for wholesale and distribution businesses: a revolving facility secured against warehouse inventory, so your buying power does not stall between supplier invoice and customer payment.
Stock Finance for Manufacturers
Stock finance for UK manufacturers: revolving facilities secured against raw materials, WIP, and finished goods to keep production running without waiting on customer payments.
Trade Finance UK: Letters of Credit & PO Finance
Letters of credit, supplier finance and purchase-order funding for UK limited companies. We place trade finance with specialist trade desks, from £25k.
Revolving Credit Facility UK
A revolving credit facility gives a UK business a pre-agreed limit to draw, repay and redraw as cash flow demands, paying interest only on what is drawn. How an RCF works, how it is priced, and how it differs from an overdraft. We place these facilities across a commercial lender panel.
Business finance by location
Lender appetite varies by city and region. If you would rather start from where your business is based, these local guides cover the same funding with the local picture.
Researching Stock & Inventory Finance? Get the free guide
Plain-English, UK-specific. What it costs, who qualifies, and how to get the best terms, straight to your inbox.
- How stock & inventory finance works and what it really costs
- Eligibility and the documents lenders ask for
- How CoreFi matches you to the right lenders from our panel
Ready to Get Funded?
Submit your details and we'll match you with the right lenders from our panel. No obligation, no fees.
Get matched with lendersCoreFi is a trading name of JG Core Ltd (Company #16218779, England & Wales). CoreFi acts as a commercial finance broker and does not provide regulated financial advice. All products described are unregulated business-to-business finance. Information on this page is for general guidance only and does not constitute a formal offer of finance. Terms, rates, and availability are subject to lender criteria and may change without notice.