Floorplan finance

If your business specialises in selling high-value items such as cars or electronics, finding the funds needed to purchase those items can place a big strain on cash flow. Floorplan finance is designed to provide the funds you need to buy inventory for your business, helping you put products on the shelves without making a significant dent in your day-to-day cash flow.

How does floorplan finance work?

Floorplan finance, which is sometimes also known as inventory finance, is designed to help retailers purchase high-value items for resale to customers. This type of financing provides a revolving line of credit, providing access to the funds you need to purchase inventory for your business and stock the shelves.

The way it works is quite simple: the lender pays the manufacturer or distributor for the stock you purchase. Then when an item is sold, you repay the appropriate amount of floorplan finance to the lender. This ensures that you don't have too much working capital tied up in your business inventory, leaving other funds free to provide the cash flow your business needs from one day to the next.

What can you use floorplan finance for?

Floorplan finance allows you to continue to help your business grow without tying up all your funds to purchase inventory. It allows you to purchase the items you need to stock the shelves and get customers through the door, but at the same time ensures that you have enough cash flow to manage and expand your business.

It's also an extremely useful form of financing for seasonal business or those that experience fluctuating cash flow. For example, in the lead-up to Christmas, retailers need to purchase extra stock to cope with the anticipated increase in sales. Many smaller retailers simply don't have enough cash available to purchase the necessary stock, so inventory finance provides the funds they need to maximise sales during this busy shopping period.

Manage cash flow

If you're waiting on payment from invoices that could help you free up funds to purchase additional stock, invoice financing could be an option to consider. It's a type of business loan that is secured by the unpaid invoices and comes with reduced risk, no asset requirements or interest payments.

Compare invoice financing products below.

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Finder Score	Min. Loan Amount	Max. Loan Amount	Loan Term	Upfront Fee	Filter Values
Promoted Finder Score 9.5 Excellent Valiant Finance Business Loan Broker	Finder Score 9.5 Excellent	$5,000	$20,000,000	3 months to 7 years	$0 application fee		A Business Lending Specialist from Valiant Finance can give you access to competitive business loans from over 80 lenders. Loans between $5,000 and $20 million are available. Request a call – your loan can be funded in 1 business day.	Enquire nowMore info Compare product selection Compare	loading
Finder Score 7.9 Great ScotPac Invoice Finance	Finder Score 7.9 Great	$200,000	$150,000,000	1 to 2 years	Establishment fee 1% of the limit		Improve your business cash flow by financing your outstanding invoices. No minimum trading history required, but minimum 12 - month term and $200,000 in invoices.	Go to siteMore info Compare product selection Compare	loading
Finder Score 8.8 Great NAB Vehicle & Equipment Finance Offer	Finder Score 8.8 Great	$10,000	$150,000	1 to 5 years	$500 initial set up fee		Benefit from a low fixed rate and no upfront deposit to purchase vehicles and equipment for your business.	ContinueMore info Compare product selection Compare	loading
Finder Score 8.4 Great Stratton Finance Business Car Loan	Finder Score 8.4 Great	$10,000	$300,000	1 to 7 years	$482		A business vehicle loan for up to $300,000, with flexible contract terms and fast turnaround times.	ContinueMore info Compare product selection Compare	loading
Finder Score 8.2 Great NAB Vehicle & Equipment Finance	Finder Score 8.2 Great	$10,000	$150,000	1 to 5 years	$600 initial set up fee		Benefit from a low fixed rate and no upfront deposit to purchase vehicles and equipment for your business.	ContinueMore info Compare product selection Compare	loading
Finder Score 8 Great Swoop Finance Business Loan	Finder Score 8 Great	$5,000	$20,000,000	3 months to 30 years	Depending on your loan contract		Apply online and borrow between $5,000 and $20,000,000. Available to businesses with a minimum of 6 months operating history and have $20,000 in turnover.	ContinueMore info Compare product selection Compare	loading
Finder Score 7.7 Great Cash.com.au Commercial Finance	Finder Score 7.7 Great	$5,000	$500,000	3 months to 6 years	$0 application fee		You’ll receive a rate from 5.89% p.a. based on your circumstances. Both secured and unsecured business loans are available from $5,000 - $500,000, on terms of up to 5 years.	ContinueMore info Compare product selection Compare	loading
Finder Score 7.3 Great Funding Pro Invoice Finance	Finder Score 7.3 Great		No maximum amount	1 to 3 months			ContinueMore info Compare product selection Compare	loading
Finder Score 7.3 Great Funding Pro Invoice Discounting	Finder Score 7.3 Great		No maximum amount	1 to 3 months			ContinueMore info Compare product selection Compare	loading
Finder Score 7.2 Great Invoice Financing Australia	Finder Score 7.2 Great	$50,000	$5,000,000				ContinueMore info Compare product selection Compare	loading
Finder Score 7.1 Great Westpac Invoice Finance	Finder Score 7.1 Great	$500,000	No maximum amount				ContinueMore info Compare product selection Compare	loading
Finder Score 7 Great Single Invoice Finance	Finder Score 7 Great		No maximum amount		3 to 5%		ContinueMore info Compare product selection Compare	loading
Finder Score 7 Great Funding Pro Trade Finance	Finder Score 7 Great		No maximum amount	2 to 4 months	2% establishment fee		ContinueMore info Compare product selection Compare	loading
Finder Score 6.9 Standard Bigstone Asset Finance	Finder Score 6.9 Standard	$10,000	$2,000,000	1 to 5 years	$250		Borrow up to 100% of the value of your assets with no ongoing fees and the option for low doc finance.	ContinueMore info Compare product selection Compare	loading
Finder Score 6.6 Standard MiFinance ABN Loan	Finder Score 6.6 Standard	$100	$1,000	16 to 30 months	20%		ContinueMore info Compare product selection Compare	loading
Finder Score 6.5 Standard Cashflow Finance’s Debtor Finance	Finder Score 6.5 Standard		No maximum amount	1 to 3 months			ContinueMore info Compare product selection Compare	loading
Finder Score 6.4 Standard Cashflow Finance's Equipment Finance	Finder Score 6.4 Standard	$20,000	$500,000				ContinueMore info Compare product selection Compare	loading
Finder Score 6 Standard Earlypay Equipment Finance	Finder Score 6 Standard	$50,000	$1,500,000	2 to 5 years	$750 - Establishment fee		Upgrade or expand your business's equipment with equipment finance from Earlypay. Borrow from $50,000 to $1,500,000.	ContinueMore info Compare product selection Compare	loading
Finder Score 5.5 Standard Royal Finance Secured Business Loan	Finder Score 5.5 Standard	$50,000	$5,000,000	2 months to 1 year	depends on amount borrowed		Get access to a loan from $50,000 to $5,000,000 with Royal Finance. Standard loan terms range from 2 months to 1 year, extensions are also available.	ContinueMore info Compare product selection Compare	loading
Finder Score 5.5 Standard Fifo Capital Business Finance Business Loans	Finder Score 5.5 Standard		$350,000	3 to 18 months	Available on application		Borrow between and $350,000 with Fifo Capital who offer short approval times to support your business.	ContinueMore info Compare product selection Compare	loading

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How to compare floorplan finance loans

There are several important factors you'll need to consider when comparing floorplan finance loans for your business, including:

• Interest rates. The interest rate that applies to your line of credit will impact the total cost of repaying the money you borrow, so compare interest rates across lenders to find the best value for money.
• Fees. Floorplan finance fees can also affect the total cost of financing. Remember to check for upfront charges such as application or establishment fees, as well as any ongoing fees that apply to the business loan facility.
• Secured or unsecured. Most forms of inventory finance are secured directly to the inventory items you purchase and then re-sell. However, unsecured financing is also available in some cases. Make sure you compare both options to decide whether a secured or unsecured loan is right for you.
• Loan amount. Check with each lender to find out the maximum amount you'll be allowed to borrow.
• Repayment flexibility. Check how long you have to repay the funds you borrow after items of inventory are sold. When you sell stock purchased with floorplan financing, you either repay the debt or purchase more stock. The lender will also conduct periodic stock checks. If you have insufficient stock to secure the funds you have borrowed you'll have to repay some of the finance.
• Type of inventory. Inventory finance can be used to purchase a wide range of high-value items, from cars and motorcycles to electronics and even agricultural equipment. Check which types of inventory your lender will allow you to finance.

Is there anything to avoid?

There are a few key risks you should be aware of before applying for inventory financing. Consumer appetites can be quite fickle, so items that are in high demand now may quickly go out of fashion. Business sales could take an unexpected downturn, while there's also a risk that items could be stolen or damaged. When any of the above happens, you could be left with a loan that you may struggle to repay.

Speaking more generally, it's always important to be careful not to get in over your head. Never borrow more than you can comfortably afford to repay, and remember to check the fine print to familiarise yourself with all the fees and charges that will apply to your loan facility.

Frequently asked questions

• What is the difference between floorplan finance and a traditional business loan?

  Floorplan finance is a specialised form of lending designed for businesses that hold large amounts of stock, such as car dealerships or equipment suppliers. Unlike a traditional business loan that provides a lump-sum amount upfront, floorplan finance gives you access to a revolving line of credit you can draw on to purchase inventory as needed. You generally only pay interest on what you use, helping manage cash flow more effectively.

• Who can apply for floorplan finance in Australia?

  Floorplan finance is typically available to businesses that sell high-value goods on a regular turnover, such as motor vehicle dealers, marine retailers, caravan sellers, or machinery distributors. Lenders usually look for established trading history, strong sales volume and evidence of good stock management before approving finance.

• How does repayment work with floorplan finance?

  Repayments are usually made when each financed item is sold. Once you sell a vehicle or piece of equipment, you repay the lender the financed amount (plus any interest or fees for that period). This approach helps align repayments with your sales cycle, making it easier to manage cash flow.

• Can new dealerships or startups get floorplan finance?

  It can be difficult for new dealerships to secure floorplan finance as lenders often prefer businesses with an established sales record and strong financials. However, some lenders may consider startups with a solid business plan, industry experience and additional security. Check eligibility criteria before you apply to avoid risk of rejection.

• What can floorplan finance be used for?

  Floorplan finance can be used to purchase vehicle stock, machinery, agricultural equipment, boats, caravans, or other large retail goods that need showroom display. Depending on the lender, it may also be used to cover associated costs like transport, pre-delivery inspections and preparation.

• What are common fees or costs with floorplan finance?

  In addition to interest on the funds used, lenders may charge audit fees, line fees, account-keeping fees or penalty charges if stock remains unsold for extended periods. It's important to review the facility agreement carefully and understand all potential costs upfront.

• What happens if stock doesn't sell within the agreed term?

  If stock remains unsold past the agreed repayment term, the lender may charge additional interest or require full repayment on that item. In some cases, they may inspect or recall the stock. Maintaining regular communication with your lender and closely monitoring stock turnover helps avoid these issues.

• Can I switch floorplan finance providers?

  Yes. Businesses often refinance or switch providers to get better interest rates, higher limits or more flexible repayment terms. However, switching may come with exit fees or new setup costs, so it's best to compare offers carefully before making a change.

• Is floorplan finance secured or unsecured?

  Floorplan finance is generally secured. The financed stock itself acts as collateral and depending on the lender, personal or director guarantees may also be required. For this reason, lenders have "title" to the stock until it's paid off after sale.

• Do I need a dealer licence to apply for floorplan finance?

  Yes, most lenders require proof of a valid dealer licence relevant to your industry when applying for floorplan finance. This confirms that you're authorised to trade in the goods being financed and helps establish trust with lenders.

Written by

Tim Falk

Writer

Tim Falk is a writer for Finder, writing across a diverse range of topics. Over the course of his 15-year writing career, Tim has reported on everything from travel and personal finance to pets and TV soap operas. When he’s not staring at his computer, you can usually find him exploring the great outdoors. See full bio