Stock funding for when a key supplier moves you to cash on delivery.
- Funding available within 2 business days through some non-bank lenders, once the file is complete
- Facilities from $50K to $2M to pay suppliers at order, dispatch or delivery
- Wholesalers, retailers, manufacturers, trades and hospitality businesses that buy stock on account
- Covers cash on delivery and cash in advance purchases, freight, and stock held until it sells
- Full-doc (tax returns), low-doc or alt-doc (BAS, bank statements or an accountant's letter instead) options across our 90+ lender panel
For years the supplier gave you 30 days. Now the account has been moved to cash on delivery (COD), or the supplier wants payment before it will dispatch. The stock costs the same, but the money leaves weeks earlier, and the business has to fund that gap itself. Supplier COD finance is business funding that pays for the stock up front, then is repaid as the goods sell or over an agreed term. It is there to carry the business while normal trade terms are rebuilt. Joseph Farhat and his team can look at your purchases, your sales cycle and what the supplier has asked for and tell you what lenders are likely to offer. Before any funding, talk to the supplier and your accountant about what led to the change and what would bring terms back.
Who we can help access finance
- Wholesalers whose largest supplier has moved them from 30-day terms to cash on delivery after a late payment.
- Manufacturers now asked to pay for raw materials before dispatch, while their own customers still pay on 30 to 60 day terms.
- Trades and building businesses whose materials supplier has closed the trade account and wants payment at the time of pick-up.
- Hospitality groups whose food or beverage distributor now requires payment for each delivery.
- Growing businesses whose orders have outgrown their credit limit, with the supplier asking for cash on anything above it.
- Businesses whose other suppliers have reviewed their terms after one key supplier moved them to cash on delivery.
How Supplier COD Finance Works
Trade credit means the supplier carries the cost of your stock until each invoice falls due. On 30-day terms, a business buying $150,000 of stock a month has close to that amount on account at any time. When the account moves to COD, that $150,000 has to come from the business instead, often within the same week.
Lenders meet that need in a few ways. A revolving stock or trade facility can pay the supplier directly at order or dispatch, with each payment repaid by a set date. A business line of credit or a short-term business loan puts cash in the account to meet COD invoices as they arrive. Where customers buy from you on account, invoice finance can bring their payments forward and shorten the gap from the other side. Larger limits can be secured over property. Joseph Farhat and his team look at your purchase volumes, margins and how quickly stock turns into cash, then match the file across our panel of 90+ bank, non-bank, and specialist lenders.
Many supply agreements include a retention of title (ROT) clause, meaning the supplier keeps ownership of the goods until they are paid for. The Personal Property Securities Register (PPSR) is the national register of security over goods. Its website says that where there is a written supply agreement, the customer pays later, and the goods do not belong to the customer until paid for, the arrangement generally creates a security interest. A supplier that registers it on the PPSR in time holds a purchase money security interest, which ranks ahead of other security interests over the same goods. A supplier that does not register will be an unsecured creditor. Lenders search the PPSR before funding against stock, because a supplier's registration can rank ahead of them. What your own supply terms mean is a question for your lawyer. We are a finance broker, not a lawyer, accountant or insolvency practitioner. If the business may not be able to pay its debts as they fall due, speak with your accountant or a registered insolvency practitioner before any new borrowing.
What Lenders Assess for Supplier COD Finance
The supplier position
Stock turn
Sales and margin
Other creditors
Commercial credit file
Existing registrations
Bank statements and BAS
The Supplier COD Finance Process: What to Expect
- Tell Joseph Farhat and his team which supplier has changed terms, what it now requires, how much you buy from it each month, and what the supplier and your accountant have said so far.
- Send recent bank statements, BAS, aged payables and receivables reports, and a copy of the supplier's letter or new terms. If the figures raise questions about whether the business can pay its debts, we will pause and point you to your accountant or an insolvency practitioner.
- We compare stock facilities, lines of credit, short-term loans and property-secured options across the panel, with the cost of each over the period you expect COD to last.
- The lender issues an approval setting out the limit, rate, fees, security and repayment terms. We go through it with you before you sign.
- Funds are drawn to pay the supplier at order, dispatch or delivery. As trade terms return, the facility can be reduced or repaid under its terms.
Indicative Finance Options
| Lender Type | Indicative Rate | Security | Typical Loan Range | Loan Term | Speed to Funding |
|---|---|---|---|---|---|
| Bank | From ~8% p.a. | Property or security over all business assets, plus a director guarantee | $100K to $2M | Revolving, reviewed yearly | 2 to 6 weeks |
| Non-Bank Lenders | From ~12% p.a. | Often unsecured or business assets, plus a director guarantee | $50K to $1M | 3 to 24 months | Within 2 business days |
| Private Finance | From ~1.25% per month | Property security | $100K to $2M | 1 to 12 months | Available for unique scenarios |
Indicative figures only. Actual rates and terms depend on your project, financial position, property location, and lender assessment at the time of application. Rates are subject to change.
