Retail runs on buying ahead
A retailer's year is a cycle of spending first and selling later. Christmas stock is ordered in winter. Winter ranges are paid for in summer. Suppliers offer their best prices on bulk orders or early payment, which only helps if you have the cash. If you miss the order window, you miss the season.
Then comes the trading itself. A strong November and December can carry a store through a flat January to March. Shopping centre tenants deal with rent reviews, outgoings, marketing levies and refurbishment clauses at renewal. Opening a new store means a fit-out, a bond, opening stock and staff before the first sale. And when a landlord, supplier or the ATO pushes, a retail account can drain fast.
Retail timing problems
- Seasonal stock bought months before it sells
- Supplier discounts for early or bulk payment
- Fit-out and bonds for a new store or relocation
- Lease renewal refurbishment and make-good requirements
- Quiet trading after peak season
- ATO debt from GST and PAYG built up over a hard year
Retail scenarios
| Retailer | Situation | Exit |
|---|---|---|
| Homewares store | Needs to pay for Christmas stock before it ships | Christmas trading cash flow |
| Fashion boutique | Supplier offering a large discount for early payment on next season's range | Seasonal sales |
| Hardware store | Opening a second store with a fit-out and opening stock | Refinance once the second store is trading |
| Liquor or specialty store | Landlord requires a refit to renew the lease | Refinance or business cash flow |
| Furniture retailer | ATO debt and supplier accounts on hold | Refinance once arrears are cleared |
| Pharmacy or gift store | Owner selling, contract signed, settlement pending | Sale of the business |
| Bike or outdoor store | Buying a competitor's stock and lease at short notice | Sale of the acquired stock |
These are examples, not claimed outcomes. Each loan is assessed on its own scenario.
Why retail finance is hard to get quickly
Banks are cautious with retail and want years of financials, stock reports and a clean credit history. Their timing rarely suits a supplier deadline. A bank refinance commonly takes up to three months or more, and you may not be approved for the amount you need.
Trade credit providers want trading history and credit checks, and often cap limits at a level below what a seasonal buy needs. Cash flow lenders look at bank statements, so a store applying in March after a quiet quarter is assessed on its worst months, not its best. Read secured vs unsecured business loans for the trade-offs.
How Equity Tap works for retailers
Equity Tap lends $50k to $5m for one to twelve months against residential or commercial property anywhere in Australia, using a first mortgage, second mortgage or caveat. Most retailers we speak to use their home or an investment property as security.
We don't need tax returns, BAS, profit and loss or bank statements, and no valuation is ordered before approval. There's no credit check at initial assessment, and past defaults or ATO debt are not automatically a problem.
The loan matches the stock cycle. Borrow before the order goes in, and repay after the season. Interest for up to the first six months can be prepaid or added to the loan, so there are no scheduled payments while the stock is in transit or on the shelves. Interest is not waived, and the full cost is shown before you proceed. If you import your own stock, see wholesale and import as well.
Typical retail exits
- Peak season trading
- Sale of the stock the loan bought
- Refinance once a new store is established
- Sale of the business or of a store
- Sale of an investment property
What we need from a retailer
ID, the security property and existing mortgage details, what the money is for and evidence of the exit. For a stock buy, the supplier order or pro forma invoice and your sales history for that season are usually enough to show how the loan will be repaid. We don't need stock reports, financial statements or bank statements. See business loan documents for the full list.
How it runs
Call us, apply online or have your broker send the scenario. Once we have the property, purpose and exit, conditional approval can often be given on the phone with a term sheet in about 30 minutes. Eligible loans can settle in as little as 24 hours, often in time to meet a supplier's deadline.
Broker note
Retail clients need speed most when they're least bankable on paper: just after a slow quarter, just before the big buy. Send the scenario through the broker page. We give a fast indicative answer, and you keep the client for the refinance later.
Operating under a brand? See franchise owners. Apply online or call 1300 123 024.
Business-purpose lending only. Approval, timing and terms depend on the scenario.
Frequently asked questions
Can I borrow to buy Christmas stock?
We had a slow quarter. Will that count against us?
Can the loan fund a new store fit-out?
Do I need to own the shop?
Can you move fast enough to catch a supplier discount?
Do you need my financials?
How long should I borrow for?
Brokers: send the scenario through the Equity Tap broker channel and you will deal with the same lending team.