Short-term loans for a seasonal stock buy

Retailers, wholesalers and growers all know the feeling. The season that makes the year is coming, and the stock that will sell in it has to be paid for now — often before last season’s money has fully come in. A short-term loan secured by property, or an unsecured option for a steady trading business, lets you buy the right amount of stock at the right time.

When does a seasonal stock loan make sense?

It fits when there’s a predictable peak and a clear gap between paying for stock and selling it. Typical examples:

• Christmas retail — toys, homewares, gifts, fashion, ordered from August to October.
• Summer lines — pool supplies, air conditioners, outdoor furniture, bought in winter.
• Agricultural seasons — seed, fertiliser and chemicals ahead of planting, repaid after harvest.
• Trade show or launch stock — a big range ordered ahead of a fixed event.
• Supplier deals — a bulk discount or end-of-line buy that’s only open for a few days.

The common thread: a known peak, a known supplier deadline and sales that should arrive within months.

How much should I borrow?

The right figure is the cost of the stock, not the sales you hope to make from it. Build it up like this:

1. Supplier invoice for the stock itself.
2. Freight, insurance and import charges, if you’re importing.
3. A buffer for currency movements, price changes or a late shipment.
4. Less any cash you’re putting in yourself.

Then sanity-check the order. business.gov.au suggests reviewing sales trends and stocktakes to identify slow-moving items and avoid over-ordering. Last year’s sell-through is the best guide to whether the order size is realistic.

Which short-term structure fits?

Your situation	Structure	Notes
Trading business, steady bank statements, no property	Unsecured or cash-flow option	Usually in the $5k to $500k range
Victorian property with a bank loan	Caveat loan	Sits behind the bank; quick to arrange
Property in any other state with a bank loan	Registered second mortgage	Fills the caveat’s role across the rest of Australia
Property owned outright	Short-term first mortgage	Most room for a big buy

Secured business loans run between $20k and $5m. Supplier deadlines are often tight, so timing matters: secured amounts up to $250k may be possible on the day, and up to $5m may be possible within 24 to 48 hours. If the order date is close, send your enquiry through now and mention the supplier’s payment date.

What helps the application? The supplier’s pro forma invoice or order confirmation, a summary of last year’s peak-season sales, and the shipping timetable if the stock is imported. Those three documents show us what the money buys, when it turns back into cash and how confident you can be about the sell-through. Add the property details and current loan balance if you’re offering security, and the file is usually ready to move.

How do I time repayment around BAS and GST?

This is where seasonal businesses trip up. The cash from peak sales feels like profit, but part of it is GST that belongs to the ATO.

Match your peak to the BAS that will report it. Quarterly lodgers report Christmas trading (the October to December quarter) on the BAS the ATO lists as due on 28 February. A summer-lines business peaking from January to March reports on the 28 April BAS, and an end-of-financial-year sale lands on the 28 July BAS. If you lodge monthly, the due date is the 21st of the month after the sales, so December’s GST is payable on 21 January — barely three weeks after the rush.

Why it matters for the loan: the busiest weeks of trading produce the biggest GST bill, and it arrives at the very moment you’re also trying to repay the stock finance. Owners who plan only for the loan repayment can find themselves short when the BAS is due. The simplest discipline: put the GST portion of every sale into a separate account, then use the rest to repay the stock loan. That way the loan is cleared without creating a tax problem — which would only lead to a different kind of loan.

An illustrative example

Fictional business; round numbers for clarity.

A Gold Coast homewares wholesaler needs to pay a $260,000 supplier invoice in mid-September for Christmas stock, plus about $30,000 in freight and charges. Its bank overdraft is already committed to day-to-day trading.

The owners have an investment townhouse on the Gold Coast worth around $950k with $330k owing, which keeps the combined LVR near 66% once the new loan is added. With the security in Queensland, we put a $300,000 registered second mortgage in place to cover the invoice, freight and costs. Stock lands in October and sells through November and December. The owners set GST aside each week and repay the loan from January receipts, with a buffer built in for slower-paying retail customers.

What if the season doesn’t go to plan?

Seasons can disappoint — a wet summer, a late shipment, a competitor’s sale. Protect yourself by:

• setting the loan term with comfortable room past the peak;
• keeping a fallback for slow stock, such as a clearance channel or a returns agreement with the supplier;
• talking to the desk early if sell-through is running behind, rather than waiting for the due date.

If big seasonal buys are becoming a regular thing, a longer-term working capital facility may suit better. Use this season’s results to make that case. For a one-off big order from a single customer instead, see funding a large order or contract.

Peak season coming? See if you qualify

Getting the stock in before the rush is what makes the season, and we’d like to help you get it on the shelves. Our form is short — around 60 seconds — and starting it involves no credit check when you first enquire. Your details stay with our desk rather than being fired off to every lender in the country. A real person reads your situation, looks at the supplier timeline and gives you a call.

Please enter the details carefully: the property address and state if you’re offering security, the stock amount and the supplier’s payment date.

Fund this season’s stock →