Credicorp
Restocking finance UK: getting stock in before payday
Retail and stock-led businesses live on a payday-and-restock cycle. When the restock falls before payday, short-term finance is the difference between a busy week and a missed week.
The classic retail / hospitality / wholesale cashflow shape: payday arrives, the stock you need to buy for the next selling period arrives before payday, and the gap between paying suppliers and getting paid for the resulting sales is the gap that has to be financed somehow. Short-term finance for that gap — what we usually call "restocking finance" — is one of the oldest forms of business borrowing, and it's still one of the most useful when the shape fits.
What the shape looks like
A small shop sells £8,000 of stock per week. The supplier requires a £3,200 deposit at the start of the week to release the next week's stock (40% of net retail value, a common wholesale arrangement). The shop collects £8,000 across the week via card payments, which settle Tuesday-following. The £3,200 deposit is due Monday-this. The cashflow gap is 7-10 days, every week.
If the previous week's takings have already cleared and the bank balance covers the deposit, no finance is needed. If they haven't (a card-processor delay, a slow Saturday) or if the shop is growing and the deposit creep is faster than the takings creep, finance is needed.
The finance options
Four real options in roughly cheapest-to-most-expensive order:
- Trade credit from the supplier. Negotiate longer payment terms ("net 14" instead of "deposit now"). Free if it works, requires a supplier relationship of trust.
- Business overdraft. Cheapest formal finance, takes weeks to set up, can be called back at short notice.
- Revolving credit facility (e.g. Credicorp Flex). The closest match to the cashflow shape — draw what you need each week, repay from the week's takings, redraw next week. Per-drawing cap caps each cycle. Setup time is hours.
- Short-term business loan. A defined lump sum for a defined restock. Works for a one-off larger restock; less ideal for the weekly cycle (the repeated origination is a small but real cost).
The cashflow discipline that matters
Restocking finance only works if the resulting sales actually generate the cashflow to repay. The discipline:
- Track the sell-through rate on each restock — what percentage of the stock actually sold inside the projected window.
- If sell-through dips below 80%, the restock is shrinking your cashflow even with finance — review pricing, supplier choice, or stock mix before the next restock.
- Use the finance for the gap, not for stock that genuinely isn't moving — financing slow-moving stock is just adding finance cost to dead inventory.
What we see most often
The Credicorp customers who use Flex for restocking finance and who get the most value from it share a common pattern: clean repayment history, accurate sell-through tracking, a per-drawing cycle that closes inside 14-21 days, and a personal limit set well below the agreed facility ceiling so that the discipline holds itself. The customers who struggle with restocking finance are usually carrying stock they shouldn't be financing in the first place — the finance is the symptom, not the cause.
If you're considering restocking finance for the first time, the business loans page has a calculator that quotes against the typical 14-30 day cycle. For more on Flex specifically, how Flex helps cashflow. For the cap, the 100% cost cap. If you sell online, our short-term lending for online retailers page covers buying inventory ahead of peaks like Black Friday and Prime Day.
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