2 min read
When it makes sense
Funding stock is sound when demand is confirmed — a purchase order, a reliable seasonal pattern, a bulk-buy discount that clearly beats the finance cost. The stock sells, the cash comes in, the loan is repaid. Check the return covers the borrowing and that stock will turn over fast enough via the inventory-turnover calculator.
The risk to manage
The danger is overstocking on hope — buying inventory that sits unsold while you still owe the loan, draining working capital. This is a classic route into overtrading. Match the stock to genuine demand, and for a recurring seasonal buy, a revolving facility you repay as stock sells beats a fixed loan.
What it means for you
Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.
Frequently asked questions
Is it risky to borrow for stock?
It's risky only if the stock might not sell. With confirmed demand and a margin that covers the finance cost, it's a sound use of borrowing. The risk is buying speculatively and being left with unsold stock and a loan to repay.
What finance suits buying stock?
For a one-off confirmed purchase, a short-term loan works. For recurring or seasonal stock, a revolving facility you draw and repay as stock turns over is usually cheaper and more flexible than a fixed loan.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.