Hypothetical example: hold-versus-sale cash schedule, 1,000 coats bought in January for $30,000
| Month | Storage | Repayment | Lot sales | Running cash |
|---|---|---|---|---|
| January | $450 | $0 | $0 | -$450 |
| February to July (each month) | $450 | $5,500 | $0 | -$36,150 after July |
| August | $450 | $0 | $0 | -$36,600 |
| September (400 units at $65) | $0 | $0 | $26,000 | -$10,600 |
| October (350 units at $65) | $0 | $0 | $22,750 | $12,150 |
| November (250 units at $65) | $0 | $0 | $16,250 | $28,400 |
| Totals | $3,600 | $33,000 | $65,000 | $28,400 |
All figures are hypothetical: $30,000 received, $33,000 total repayment in six monthly payments of $5,500, storage of $450 a month. Selling costs are left out, so add yours.
How long will I really hold the stock?
Count from the day the goods arrive to the day the last unit sells, not to the day the season opens.
In the example, the coats arrive in January and the first sale is in September, but the lot is not cleared until November. That is a ten-month life for the purchase, with eight months of storage before any revenue.
Ask yourself what could push the date later: a warm autumn, a late delivery to your sales channel, or a retailer who delays its own season. Build a version of the schedule with the first sale one month later and see whether your cash still holds.
What are the carrying costs beyond the storage bill?
Carrying costs include the storage fee, insurance, handling, shrinkage and the cost of the money you used, and they add up to more than the monthly invoice.
The example uses $450 a month, or $3,600 over eight months. Your own list may also include:
- Insurance for stock held in a third-party warehouse.
- Pick, pack and inspection fees when you move goods in and out.
- Damage, moisture or pest losses for goods stored a long time.
- The funding cost, which in the example is $3,000 ($33,000 repayment minus $30,000 received).
Total carrying cost in the example is $6,600 ($3,600 storage plus $3,000 funding cost). Spread over 1,000 coats, that is $6.60 a unit on top of the $30 purchase price. Ask the warehouse for its rate card in writing, including minimum terms.
Will there be demand for this stock next season?
Only buy for next season if the product will still be current, and if you can point to evidence that it sold well this year.
Look at your own sell-through for the same item last season and whether the style, size range or model changes next year. Basic, repeat-purchase products are safer to hold than anything tied to a trend or a model year.
Test the downside. If only 600 of the 1,000 coats sell at $65, sales are $39,000, and after $36,600 of costs before sales begin, the lot leaves just $2,400 before selling costs. Not much of a cushion for a ten-month hold. If the plan only works at full sell-through, treat the deal as risky. Our pre-season inventory buying guide covers how to size the order.
Can I repay before sales begin, and how should I structure it?
If repayment starts in February and sales start in September, you need other income to cover seven months of payments, so the structure must fit the hold, not just the deal.
In the example, six payments of $5,500 are due before the first sale, and with storage the owner puts out $36,600 before September. Where will that come from? If it comes from regular sales, the plan is fine. If not, the timing is wrong.
Ask about the options a funder may review, and compare them against your calendar. A line of credit for buying opportunities lets you draw when you need cash, which can fit a purchase better than one lump sum, and the credit line for supplier deals page explains what to prepare. Rate, term and payment schedule vary by product and by the strength of the business.
When you have a draft schedule, start your application and attach the clearance quote and your hold plan.
Frequently asked questions
Is it a good idea to buy clearance stock a season early?
It can be, if the product stays current, the discount is real and your cash covers storage and repayment until sales begin. It is a poor idea if demand is uncertain or if you must borrow just to cover the months of waiting.
How do I estimate storage cost?
Get a written rate card from the warehouse or compare it with your own space cost per pallet. Multiply the monthly cost by the months held, and add insurance and handling fees for moving the goods in and out.
Can I match repayment to my selling season?
Payment schedules vary by product and by the business. Ask the funder to explain the schedule in writing, then check it against your calendar. Some products allow you to draw as you need cash instead of taking everything at once.
What documents will a funder want?
Commonly requested items include recent business bank statements, government-issued ID, a voided business check and the clearance quote. A longer hold or larger amount may add tax returns or financial statements.
Does applying affect my credit score?
Checking your options does not affect your personal credit score, and there is no obligation to accept an offer. Funders decide and set terms after reviewing your file.
Describe your purchase and deadline
Share the quote, how long you plan to hold the stock and when you expect to sell, and we will help you get it in front of funders.
Updated October 17, 2026 · Prime Funding Now Funding Team