Raising Finance for to increase your stock levels are often used in conjunction with other forms of commercial finance such invoice discounting or overdraft facility. Stock lending is often only suitable with companies, which has confirmed purchase orders from a credit worthy customer and where the product does not have to be altered before it is delivered to the end user.
A funder will finance against the trade price or the Net Ordinary Liquidated Value (“NOLV”) of the stock. In essence this would be the value stock in the event of a failure of a business. In depending the advance rate to be applied against the NOLV the funder will take into consideration the nature of the debt, how fast does the stock turn and other issues which could affect the selling of the stock.
Stock finance can be a productive source of raising additional finance or supporting an overpayment on an existing facility. The administration of the facility is minimal as often only monthly stock reports have to be sent to the funder.