Refinance for Retail & E‑commerce: Free Up Cash Tied in Inventory

Knowledge bomb: Inventory can tie up 20–40% of a retailer’s working capital. Releasing that cash can fund new ranges, marketing or seasonal peaks without diluting ownership.

This guide explains how UK retailers and ecommerce businesses can refinance stock to free up cash—what options exist, how lenders value inventory, costs, risks and practical next steps. Read on to see which route might suit your business and how UK Business Loans can match you to specialist lenders and brokers.

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UK Business Loans is an introducer. We do not lend or give regulated financial advice. We’ll match you to trusted UK lenders and brokers for a no‑obligation quote. Offers are subject to lender eligibility checks.

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Can retailers and e‑commerce businesses refinance inventory?

Short answer: Yes. There are several refinancing routes that can release cash locked in stock — including specialist stock finance, asset‑based lending (ABL), sale & leaseback, supplier/purchase order finance and stock securitisation. Which is best depends on your stock type, margins, turnover and overall credit profile.

At a high level, options fall into secured vs unsecured and short‑term vs longer term. Secured options (where the lender takes a charge over stock) typically allow higher advance rates but come with monitoring. Unsecured or relationship credit lines can be faster but usually smaller.

Read on to see the main options and who they suit.

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Common refinance options that release cash from inventory

Below are the principal solutions lenders and brokers offer to retailers and ecommerce businesses.

Stock / Inventory Finance

What it is: A lender advances a percentage of stock value as working capital. Advances depend on liquidity of goods (fast‑moving branded lines get higher rates than slow‑moving clearance stock).

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• How it works: Lender takes a security interest and may perform stock audits or remote monitoring. Advances often tier by SKU class.
• Best for: Retailers with clear turnover data and good stock controls.
• Common drawbacks: Monitoring costs and lower advances for slow or obsolescent lines.

Asset‑Based Lending (ABL) & Revolving Asset Facilities

What it is: ABL combines inventory and receivables under one facility. Revolving structures suit seasonal retailers who need variable access through peaks and troughs.

• How it works: Facility size adjusts with the value of eligible assets; repayment linked to cash conversion.
• Best for: Established retailers with predictable sales cycles and higher volumes.
• Common drawbacks: More complex documentation and covenant packages.

Invoice Finance + Inventory Finance (Blended)

Combining invoice and stock funding increases liquidity. Invoice finance frees cash from receivables while stock finance covers warehouse value—together they improve borrowing capacity.

• Best for: Businesses with both strong receivables and stock positions.
• Common drawbacks: Higher overall fees if using multiple providers; bundling through one lender can reduce cost.

Sale & Leaseback (for high‑value or display stock and fixtures)

Mechanic: Sell branded stock or shop fixtures to a funder then lease them back. Releases capital while preserving trading stock on the balance sheet where structured correctly.

• Best for: High‑value displays, demo stock or branded collections.
• Common drawbacks: Not suitable for perishable or rapidly obsolete goods; lease costs apply.

Supplier / Purchase Order Finance

Provides funds to pay suppliers or fulfil large purchase orders—reduces the need to hold large safety stock and speeds inventory turnover.

• Best for: Ecommerce businesses scaling up or taking bulk buys with supplier discounts.
• Common drawbacks: Often priced for short term; requires credible supplier relationships.

Stock securitisation / Warehouse Receipt Financing

Used by wholesalers and large retailers with commodity‑style or bulk stock. Stock held under a legal warehouse receipt can be monetised into a structured facility.

• Best for: Large volume wholesalers and distributors.
• Common drawbacks: Legal and warehouse costs; typically for higher value inventory.

Here’s what to know next: lenders assess stock quality and systems more than headline value—accurate data improves outcomes.

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How lenders value inventory

Lenders look beyond the headline stock figure. Key factors include turnover rate, ageing, obsolescence risk, perishability, return rates, storage location, quality controls and shrinkage rates.

Typical advance ranges are indicative only and vary by product and lender. For fast‑moving consumer goods you may see materially higher advances than for bespoke, seasonal or clearance lines—figures are indicative and vary by lender.

Common documentation lenders require:

• Detailed stock lists and ageing reports (SKU level)
• Recent management accounts and turnover evidence
• Warehouse agreements, insurance certificates and stock audit reports
• ERP/exported stock files and sales history

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Costs, risks and things to watch

Costs include arrangement and monitoring fees, interest or margin over base, insurance, valuation and legal fees (including registration of charges). There can also be ongoing audit or third‑party stock control charges.

Risks to consider:

• Overstated or obsolete stock leading to lower recovery values
• Covenant breaches from mismatched cashflows or sales shortfalls
• Operational costs of lender monitoring and potential restrictions on stock movements

How to mitigate:

• Maintain accurate, auditable stock records and SKU‑level turnover data
• Insure stock and use reputable warehousing
• Ask lenders for clear security and default terms; use a broker to negotiate stronger protections

We share your enquiry only with selected lenders/brokers. Matching does not guarantee an offer.

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Case examples

Example 1 — FMCG retailer seasonal boost

Objective: Bridge cashflow ahead of Christmas peak. Solution: Short‑term inventory finance with monthly stock audits. Outcome: Released six weeks of stock value, funded extra buying, sales rose 18% during peak.

Example 2 — Niche fashion ecommerce refresh

Objective: Replace slow SKUs and fund new collection. Solution: ABL facility combining receivables and eligible stock. Outcome: Freed cash to buy new lines, reduced slow‑moving stock, margin improved.

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How to qualify and prepare

Checklist before applying:

1. Up‑to‑date SKU stock reports with costing and ageing
2. Last 12 months sales and returns data, plus forecasts
3. Recent management accounts and bank statements
4. Warehouse addresses, insurance and any third‑party custody agreements
5. Supplier contracts and purchase orders if using purchase order finance

Tips to improve eligibility: reduce slow‑moving lines, tighten returns procedures, centralise warehousing where possible and consider pre‑sale promotions to demonstrate demand.

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Why use a broker/introduction service like UK Business Loans?

We save you time by matching your business with lenders and brokers that specialise in stock and retail finance. That increases your chances of receiving competitive offers quickly.

• Faster matching to specialist lenders
• No‑obligation and free to use
• We handle the initial documentation requests to speed lender responses
• We work with partners experienced across retail and ecommerce sectors

Important: UK Business Loans is an introducer. We do not lend or provide regulated financial advice. Matching to lenders/brokers does not guarantee an offer.

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FAQs

Will refinancing inventory affect my credit score?

Initial enquiries do not affect credit. Lenders may perform checks if you proceed to an application.

How long does inventory finance take to set up?

From a few days for simple facilities to several weeks for audited, secured arrangements.

Is my stock at risk if I default?

Many lenders take security over stock. The exact risk depends on your agreement—review terms carefully.

Can start‑ups or firms with imperfect credit apply?

Some specialist lenders consider turnover, gross margin and stock quality rather than just credit history.

Are there industries where inventory finance is hard to get?

Perishables, very bespoke or rapidly obsolescent goods are more difficult to fund.

Do I have to move stock to a lender‑approved warehouse?

Often required for higher advance rates; smaller lenders may accept well‑controlled own warehouses with monitoring.

Can I combine inventory finance with other funding?

Yes — blended solutions (invoice finance + inventory finance) are common to maximise liquidity.

Is inventory finance taxable?

It affects cashflow and balance sheet treatment; consult your accountant for tax implications.

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Next steps & how UK Business Loans helps

Simple process:

1. Complete our short enquiry form (it takes about 2 minutes).
2. We match you to lenders/brokers that specialise in inventory finance.
3. Selected partners contact you to request documentation and provide quotes.
4. Compare offers, choose the best fit and proceed directly with the lender/broker.

We commonly assist with facilities of £10,000 and above. Your enquiry is not an application — it’s information to help us match you with the best partners.

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UK Business Loans is an introducer. We do not provide regulated financial advice. Matching to lenders/brokers does not guarantee an offer. We share enquiry details with selected lenders and brokers. View our Privacy Policy.

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For a focused overview of refinancing options and legal considerations, see our dedicated resource on refinance loans.

By UK Business Loans content team. Reviewed by industry brokers and lenders. Published: 01 Nov 2025. Last reviewed: 01 Nov 2025.

1. How can I refinance inventory to free up cash for my retail or e‑commerce business?
Refinancing inventory typically uses stock finance, ABL, sale & leaseback or purchase‑order finance to convert stored stock into working capital without selling equity.

2. How much can I borrow against my inventory (typical advance rates)?
Advance rates vary by stock quality and liquidity but fast‑moving branded lines often attract materially higher advances than slow or obsolete SKUs, with exact percentages set by the lender.

3. What documents do lenders usually require for inventory or stock finance?
Lenders commonly ask for SKU‑level stock lists and ageing reports, recent management accounts, sales and returns history, warehouse details, insurance certificates and ERP export files.

4. Will making an enquiry with UK Business Loans affect my business credit score?
No, an initial enquiry through UK Business Loans does not affect your credit score and lenders may only carry out credit checks if you progress to a formal application.

5. How long does it take to set up inventory finance or an ABL facility?
Simple stock facilities can be arranged in days while larger asset‑backed or audited facilities with legal charges normally take a few weeks to complete.

6. Is my stock at risk if I default on a stock‑backed facility?
Many lenders take a security interest over stock so the specific risk to inventory depends on your facility terms and should be reviewed with the lender or broker before proceeding.

7. Do I have to move my stock to a lender‑approved warehouse to qualify?
Higher advance rates often require stock to be held in approved or third‑party warehouses with monitoring, though some lenders accept well‑controlled retailer warehouses with strong controls.

8. Can I combine inventory finance with invoice finance to increase liquidity?
Yes, blended solutions combining invoice finance and stock finance are common and can increase available working capital when managed through one lender or coordinated providers.

9. Which types of stock are hardest to refinance?
Perishables, highly bespoke items, very low‑margin commodities and rapidly obsolescent goods are typically harder to fund due to valuation and resale risks.

10. What is the difference between submitting an enquiry and applying for a loan with UK Business Loans?
Submitting an enquiry is a free, no‑obligation step to be matched with specialist lenders and brokers and is not a formal application, with offers subject to lender eligibility checks.