Why is stock such a cash flow squeeze?
Because you pay for it before you earn from it — sometimes months before. A garden centre buys for spring in winter. A surf shop orders for summer in August. An importer pays a deposit, then freight, then GST and duties at the border, all before a single unit reaches a customer.
Meanwhile rent, wages and everything else keep ticking. It’s no surprise that stock purchases are one of the most common reasons New Zealand retailers, wholesalers and hospitality owners look for funding.
How much stock should I buy?
A friend who’d run a shop would tell you to start with your own history:
- Look at last season’s sales for the products you’re ordering, week by week.
- Note where you ran out — those are lost sales you can win back.
- Note what didn’t sell — that’s cash you tied up for nothing.
- Adjust for this year: new customers, a new location, a supplier price rise, or a softer local economy.
Then work backwards from the date the stock needs to be on the shelf. If a supplier needs payment eight weeks ahead, your funding needs to be in place before that — not the day before.
The goal isn’t to fill the storeroom. It’s to have the right stock on the shelf in the week customers want it.
What are my funding options?
Unsecured business loan
Based mainly on your turnover and bank statements, usually for businesses trading six months or more. It’s a tidy fit for a single seasonal order where you can see when the money will come back in. Weaker credit is considered.
Business line of credit
If you reorder through the year, a line of credit lets you draw what you need for each order and pay it back as stock sells. You’re not paying for money sitting idle between orders.
Property-secured business loan
For big orders, bulk deals or combined needs — stock plus a shop refresh, say — a loan from $20,000 up to $1m secured on NZ property can give you more room. No financials or tax returns are needed at the initial assessment, which helps if your year-end accounts aren’t finalised yet.
Is a bulk-buy discount worth borrowing for?
Sometimes. Do the maths honestly:
| Question | Why it matters |
|---|---|
| How much do you actually save per unit? | That’s your gain |
| How long until the extra stock sells? | That’s how long you’re paying to borrow |
| What does storing it cost? | Space, insurance, spoilage or fashion risk |
| What else could that cash be doing? | Wages, marketing, a buffer |
If the saving clearly beats the cost of borrowing and storage over the time it takes to sell through, it’s a good deal. If it only works when everything goes perfectly, it isn’t.
What do lenders want to know about stock?
They’re mostly interested in whether the business can comfortably repay. Expect questions about your trading history, turnover, existing debts and how the stock will turn into sales. Showing last year’s seasonal sales pattern is one of the most persuasive things you can bring — it proves you’re not guessing.
How LendFriend helps
Tell us what you’re buying, when it needs paying for and when it usually sells. We’ll look at your situation and match you with a lender from our panel whose product fits the rhythm of your stock — so repayments line up with the cash coming in, not against it. Every loan is priced on your circumstances, and we’ll explain the offer before you commit.
Start your enquiry — it takes about 60 seconds and won’t touch your credit score.
The honest bit
Stock is only an asset if it sells. Borrowing for new, unproven lines is a gamble — start with the products that already fly off the shelf, and let those profits fund the experiments.