This is a Revolving Credit facility which is to be used exclusively for the purchase of stock.
Think of it as a form of overdraft.
Payments are made to suppliers (often direct by the lender) for the purchase of stock. The repayment of the facility comes when that stock is sold, and funds have been received.
As facilities are revolving, once repaid, the facility then becomes available to use again.
The stock sales cycle is key to understanding the benefit and cost of such a facility.
Facilities are available from £25k to £500k.
Security requirements vary subject to circumstances, but can include Personal Guarantee, Debenture, charge over Stock, charge over Property.
Facilities are charged annually, based on total credit limit. You also pay monthly interest based on funds in use.
Stock Finance for Car Dealerships is a stand alone product and a form of Asset Finance.
Acceptable customer types include: Sole Trader, Partnership, Limited Company (Ltd) or Limited Liability Partnership (LLP).
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