Financing Christmas Stock: Why September Is the Decision Point
By 121 Brokers Team, Commercial finance brokerage
· 14 min read
· Published
September is the decision point for Christmas stock because the money leaves first. Supplier deposits fall due in September, balances before shipment in October, landing costs in mid-November, and the cash only returns from late November. Arranging a facility takes time, and a September decision keeps every option open.
This article puts dates on a $120,000 order placed on 7 September 2026, shows the cash gap week by week, and compares four ways to bridge it. Reading it in October? There is a short section on that below.
Why September is the decision point
Christmas stock is paid for in three instalments before it earns a dollar: the deposit at order, the balance before the supplier ships, and freight, duty and GST when it lands. Sales do not start until late November. A facility has to be in place before the first payment, which for most orders means September.
Two clocks run at once. The supplier's clock is set by production and shipping: freight forwarders quote 30 to 40 days door to door by sea from China and around 8 to 10 days by standard air, with sea freight in its peak pricing season from July to October. An order placed in early September lands in mid-November with little slack.
The lender's clock is the one owners forget. Every facility needs an application, documents and an assessment; a secured facility adds valuation and legal work. None of it speeds up for Christmas. If the first lender declines, you want time to place the file with a second before the October balance. September is the last month that leaves that room.
The seasonal pull is real but not a promise. The Australian Retailers Association and Roy Morgan forecast $72.4 billion of pre-Christmas retail spending for the six weeks to Christmas Eve 2025, 4% more than in 2024. A forecast says nothing about your takings; it does confirm the selling window opens in November.
Reading this in October?
The logic holds and the menu shrinks. If the deposit has already come out of your own cash, the pressure point is the 70% balance and the landing costs behind it. Trade finance on the balance alone, an existing line of credit or an unsecured term loan are the realistic bridges, and a late order may need air freight, which lifts the landing cost line.
The Christmas stock cash-flow curve
Seasonal stock finance is short-term funding that pays for inventory bought ahead of a peak trading period and is repaid from the sales that follow. It bridges the gap between paying the supplier and being paid by customers, which for Christmas stock in Australia runs from September to January.
Deposit at order
Sourcing consultancies commonly quote standard terms with overseas manufacturers as a 30% deposit at order and 70% before shipment, or 70% against the bill of lading once the goods are loaded. Established buyers sometimes negotiate the balance after receipt; a new relationship usually means paying most of the money before the container leaves.
Balance before shipment
The balance falls due when the goods are ready, not when they arrive. On a 30/70 split it is more than twice the deposit, and it lands in the same month as the September quarter BAS. Paying against the bill of lading proves the goods are on the water, but there is still nothing to sell for another three to six weeks.
Freight, duty and GST on landing
Landing costs are the cash-out most owners under-budget. Sea freight, port charges, customs clearance, any duty and GST on the taxable importation all fall due around arrival. For a registered business the import GST is generally claimable on the next BAS, so it is a timing cost, but it must be paid first unless you are approved for the ATO's deferred GST scheme. As reported by freight forwarders in July 2026, a general rate increase of USD 500 per TEU applied from 1 July, several China to Australia services were running fortnightly and importers were advised to book early, so budget above your 2025 quote. Confirm duty and GST treatment with your accountant or customs broker; our GST on landed cost calculator gives a first pass.
Sell-through and when the cash actually arrives
A sale and its cash are not the same date. Card settlements typically reach your account within days, so a retailer selling from 20 November sees cash from late November; a wholesaler on 30-day terms is paid in December and January. ABS data showed November 2025 retail turnover of $39.1 billion, 7% higher than a year earlier, before household spending eased 0.4% in December as shoppers brought purchases forward (ABS, February 2026). November carries a large share of the season, provided the stock has landed.
Three cash-outs between September and mid-November, then a sales curve that only starts once the goods are on the shelf.
Worked example: a $120,000 order placed in the first week of September
The figures are invented, chosen to show the shape of the gap; your supplier terms, lead time and landing costs will differ.
A homewares retailer places a $120,000 order with an overseas supplier on 7 September 2026 on 30% deposit, 70% before shipment. Production and sea freight give a 10-week lead time. Freight, duty and GST on landing are budgeted at $18,000. The retailer sells in store and online from 20 November to 31 December, with card settlements within days, and supplies a few wholesale customers on 30-day terms who pay in January.
Week
Date
What happens
Cash out
Running position
0
7 September
Order placed, 30% deposit paid
$36,000
$36,000 out
6
19 October
70% balance paid before shipment
$84,000
$120,000 out
10
16 November
Stock lands: freight, duty and GST
$18,000
$138,000 out (peak)
11
20 November
First sales, card settlements begin
Nil
Gap starts closing
12 to 16
27 November to 31 December
Peak trading, Black Friday to Boxing Day
Nil
Recovering
18 to 20
January 2027
Wholesale invoices paid, unsold stock cleared
Nil
Closed, if sell-through holds
The peak of the gap is about $138,000 out by mid-November against no sales at all. That is the number a facility has to carry, not the $120,000 on the purchase order. Recovery starts in the last week of November; the wholesale tail runs into January.
What the same gap costs on three facilities
Trade finance. The financier pays the supplier direct, $36,000 in September and $84,000 in October, and the retailer repays as the stock sells. At an invented illustration price of 1.5% per 30 days on the amount outstanding, not a market figure, the deposit for about 105 days and the balance for about 75 days comes to roughly $5,000 to $5,500, assuming both are settled around the turn of the year. Nothing is repaid before the stock has sold.
Line of credit. The same amounts drawn from an existing line at the 10% to 14% p.a. illustration range used across this series, not a market observation or any lender's pricing, and held for the same 105 and 75 days, come to roughly $2,800 to $3,900 in interest plus a line fee of 1% to 2% p.a. of the limit; paying down as December takings settle would trim that. Cheaper on paper, with one catch: the limit has to exist before 7 September.
Unsecured term loan. $120,000 over six months at the 12% to 20% p.a. illustration range, again not a market figure, costs roughly $4,200 to $7,000 in interest plus an establishment fee, illustrated at 2% or $2,400. The full amount is borrowed on day one and repayments start within weeks, before any stock has landed.
Change the order size, deposit split, lead time or selling dates below and the calculator redraws the cash gap and funding window for your season.
Interactive calculator
Christmas Stock Funding Timeline
$
$0 to $10,000,000.
Goods only. Freight, duty and GST on landing are not modelled.
Order by
6 Sept 2026
The order-by date has already passed. Bring the in-store date forward, shorten the lead times, or expect the stock to land late.
4days from today.
Deposit paid, from 6 Sep 2026Full order paid, from 18 Oct 2026Selling through, from 15 Nov 2026
Order and deposit($36,000)6 Sep 2026
Funding gap (deposit to first cash in)
10 weeks
Peak supplier payments exposed (excludes freight, duty and GST on landing)
$120,000
Modelled 120-day trade finance term covers the cycle (126 days)
Not fully
Indicative funding cost at 12.0%Funding cost (own cash)
$2,769
Order by 6 Sept 2026 for stock in store on 15 Nov 2026. Up to $120,000 is exposed for about 10 weeks before the first cash comes in. Funding it at 12.0% would indicatively cost about $2,769.
Funding cost is simple interest on the peak exposure for the whole gap, which is conservative: the balance is outstanding for less than the full gap.
In-store date is treated as the arrival date. Add customs, quarantine or a days-to-shelf allowance to shipping time if you need one.
Trade finance terms vary by financier and file; 120 days is the modelled assumption, not a product feature.
Estimate only, for general information. Not financial advice, a quote or an offer of finance.
Actual rates, fees and repayments are set by the lender and subject to approval and your circumstances.
How to finance a Christmas stock order, step by step
The same sequence applies whether the funding comes from retained cash, trade finance or a line of credit. The order matters more than the product.
Put dates on the cash-outs. Write down the order date, deposit date, balance date, landing date, first sale and last receipt. Get the production lead time in writing from the supplier and the transit time from the freight forwarder.
Total the peak gap. Add the deposit, the balance and the landing costs (freight, duty and GST) that fall due before the first sale. That total, not the purchase order value, is the amount a facility has to carry.
Set a sell-through and margin you can defend. Size the order to last season's sales for the same line at your real gross margin, then test whether the numbers still work if 20% of the stock is unsold at Christmas.
Match a facility to each stage of the gap. Trade finance for the supplier payments, a line of credit for landing costs, invoice finance for wholesale customers on terms, and a term loan where a fixed total matters more than cost.
Assemble one complete file. Recent financial statements, management accounts, the last few BAS, six to twelve months of bank statements, your ATO account position, the supplier's pro forma invoice and last season's sales figures.
Enquire in September, to a panel of lenders. One enquiry that reaches trade financiers, line of credit lenders and term lenders at the same time returns options priced against your timeline and leaves a second option in reserve if the first lender declines.
Set repayment to the sell-through. Agree a term that ends after the last expected receipt, including the January wholesale tail, rather than one that ends before the stock has sold.
Which facility bridges which part of the gap
No single product fits every stage. Trade finance is built for the supplier payments, a line of credit suits the landing costs, a term loan buys certainty at a price, and invoice finance releases cash from wholesale customers on terms. Most Christmas orders use one or two together.
Trade finance: the financier pays the supplier, you repay after the stock sells
A trade finance facility pays the deposit and the balance straight to the supplier, sometimes through a letter of credit, and you repay once the goods have landed and sold. Trade finance providers commonly describe repayment terms of up to 120 to 180 days, which fits a September to January cycle. Financiers weigh the supplier, the purchase order and your history selling similar stock, so a repeat line from a known supplier is an easier file than a new category. Our guide to how trade finance works for importers covers the mechanics.
Line of credit: draw for the deposit and the landing costs
A business line of credit is a limit you draw on and repay as you like, paying interest only on the drawn balance. It is the natural home for landing costs, which are lumpy, and for the deposit if the limit is already open. A line is priced for availability, with a fee on the whole limit, and it has to be approved before the season: the case for a September application even if you draw in October.
Unsecured term loan: fixed repayments from day one
An unsecured term loan puts the full amount in your account and takes it back in fixed repayments over a set term, so you know the total cost on day one. The price of that certainty is interest on money sitting idle between the deposit and the balance, and repayments that start before the stock has landed. It suits steady year-round takings and involves fewer steps than a secured facility, which matters when time is short. See matching a line of credit, overdraft or term loan to your cash flow gap and the term loan vs line of credit comparison.
Invoice finance if you sell wholesale on terms
Invoice finance does not pay the supplier, it pays you. Once you have invoiced a wholesale customer on 30-day terms, the financier advances most of the invoice value and collects when the customer pays. It closes the January tail of the gap, but only once there is an invoice to finance, so it pairs with trade finance or a line for the first half.
Which facility pays which stage of a Christmas stock order
Facility
What it pays
When repayment starts
Cost basis (indicative)
Security usually sought
Best for
Trade finance
Supplier deposit and balance, direct to the supplier
After the stock lands and sells, within the agreed term
Fee per 30 days on the amount outstanding, quoted per file
The goods and purchase order, often a director guarantee
Importers with a clear sales plan
Line of credit
Anything drawn: deposit, landing costs, wages in the gap
Flexible; interest on the drawn balance, fee on the limit
Indicative 10% to 14% p.a. on drawn funds plus 1% to 2% p.a. line fee (illustration range)
Director guarantee; larger limits may need property
Landing costs, if the limit exists in time
Unsecured term loan
A lump sum on day one
Within weeks of settlement, fixed schedule
Indicative 12% to 20% p.a. plus establishment fee (illustration range)
Director guarantee, no asset security
Owners who want a fixed total
Invoice finance
Advances against invoices to trade customers
As each customer pays
Discount fee on the invoice value, quoted per facility
The receivables themselves
Wholesalers on 30-day terms
The application clock
Lenders assess a Christmas stock file on much the same things whatever the product: recent financials, management accounts, the last few BAS, six to twelve months of bank statements, your ATO account position, the supplier's pro forma invoice, and last season's sales for the same line. Trade financiers also look at the supplier, the route and the insurance. A complete file on the first pass is the biggest thing you control.
Banks and non-bank lenders run different processes. A bank facility, particularly one secured over property, adds valuation, offer documents and settlement steps. Non-bank lenders assess mostly from bank statement data with fewer steps and, usually, a higher price. We do not quote turnaround times because they depend on the lender, the file and the queue; every step still consumes days you cannot recover in November.
September is the last sensible decision point because of the second option. If a bank declines a secured facility in late September, there may still be time to place the file with a non-bank trade financier or line of credit lender before the October balance. Start in mid-October and a decline leaves only the fastest products, usually the dearest. Start in November and the stock is already on the water. Our note on why one enquiry to a whole panel beats walking into your bank explains how a broker lines up the second option alongside the first.
Every month you wait closes a door: a September decision leaves room to compare offers and hold a second option; November leaves only the fastest products.
What each decision date leaves open, September to November
Decision date
Facilities still realistic
What you give up
Decide in early September
Trade finance, secured or unsecured line of credit, bank or non-bank term loan, invoice finance for the wholesale tail
Nothing; time to compare offers and hold a second option
Decide by 1 October
Trade finance on the balance, unsecured line of credit or term loan, invoice finance
The deposit has come from your own cash; a secured bank facility may not settle before the balance is due
Decide by 1 November
Unsecured term loan, an existing line of credit, invoice finance
Supplier paid, stock on the water; you fund landing costs and the gap to first sales with the fastest products, usually the dearest
Sizing the order you can actually fund
The order should follow the sell-through you can defend, and the facility should follow the order. On the $120,000 example at a 55% gross margin, full sell-through returns about $267,000 in sales excluding GST. If 20% is still on the shelf at Christmas, sales are about $213,000, which covers the $138,000 outlay and a finance cost of $3,000 to $10,000 with room to spare; the unsold $24,000 at cost is cleared in January at a discount.
At a 35% margin, full sell-through returns about $185,000 and 80% sell-through about $148,000; after the outlay and finance cost there is almost nothing left, with $24,000 of stock still to move. Sell-through is an assumption you set, not something the season promises, so set it from last season's sales for the same line.
Do not size the order to the facility you can get. Size it to the stock you can sell by 31 December at the margin you planned; stock that sells in February at 40% off has still cost you the finance since September.
Who this applies to
Retailers importing gift, homewares, toy or apparel lines are the classic case; our retail finance page covers the year-round version. E-commerce sellers face the same timeline with a marketplace payout cycle and a sharper Black Friday spike. Wholesalers carry the longest tail because customers pay in January. Hospitality suppliers and venues stocking for the December function season have a shorter curve but the same deposit and lead-time logic; see our hospitality finance page.
Next step
If the deposit is due in September, the useful conversation is a short one: the order size, the supplier terms, the lead time and last season's sales for the line. From that we can show you what trade finance, a line of credit and a term loan would each look like against your timeline. Start with a no-obligation conversation before the balance falls due.
121 Brokers, a business finance brokerage, is not a lender. We compare options across a panel of lenders and do not decide any application; each lender assesses your file on its own facts. Every figure in this article is an illustration or an indicative range, not a quote.
121 Brokers is a finance brokerage, not a lender: general information only, not financial, legal or tax advice, and not a recommendation of any product. Product features and criteria vary by lender. GST, duty and tax treatment depend on your circumstances; confirm them with your accountant or customs broker. Consider your circumstances and seek professional advice where appropriate.
When should a retailer order Christmas stock in Australia?
For imported stock arriving by sea, September is the practical deadline for placing the order and arranging finance. Freight forwarders quote 30 to 40 days door to door from China, and production comes before that, so an early September order with a 30% deposit typically lands in mid-November, in time for the selling window that opens in late November. Later orders usually need air freight, which raises landing costs.
How do small businesses finance Christmas stock?
Most use one of four facilities, or two together: trade finance, where the financier pays the supplier and the business repays after the stock sells; a business line of credit drawn for the deposit and landing costs; an unsecured term loan with fixed repayments from day one; or invoice finance against wholesale invoices on terms. The right mix depends on when each cash-out falls and when the cash returns, so the timeline comes first.
What is trade finance for stock?
Trade finance for stock is a facility where a financier pays your supplier directly, covering the deposit and the balance before shipment, and you repay the financier once the goods have landed and sold. Trade finance providers commonly describe repayment terms of up to 120 to 180 days. Financiers assess the supplier, the purchase order and your track record selling similar stock, not just your balance sheet.
Can I get finance to pay a supplier deposit?
Yes, in several ways. A trade finance facility can pay the deposit and the balance straight to the supplier. A line of credit can be drawn for the deposit if the limit is already approved. An unsecured term loan puts the funds in your account for you to pay it. Each lender assesses the application on its own criteria, and the deposit is usually the first cash-out, so the facility has to be in place before the order is confirmed.
How long does it take to get stock finance approved?
It depends on the lender, the product and how complete your file is, so we do not quote turnaround times. A secured bank facility adds valuation and documentation steps; non-bank lenders assess mostly from bank statement data with fewer steps. The practical rule is to apply the month before the first cash-out, submit a complete file the first time, and keep a second lender in reserve in case the first declines.
Does inventory finance cover freight and GST?
It varies by financier and facility. Trade finance is usually built around the supplier invoice, and some facilities extend to freight and landing costs while others do not. A line of credit or term loan can fund any cost, including freight, duty and GST at the border. For a registered business the import GST is generally claimable on the next BAS, so it is a timing cost. Confirm the treatment with your accountant or customs broker.
What if Christmas stock does not sell?
The facility still has to be repaid, which is why sell-through is an assumption you set before you order, not something the season promises. Test the order at 80% sell-through and at your real gross margin. If the numbers only work at full sell-through, the order is too big for the margin. Unsold stock is usually cleared in January at a discount, and a line of credit or term loan with a longer term carries that tail better than a short trade facility.
