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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Slow-moving stock

What is slow-moving stock, and how does a lender treat it in a borrowing base?

ONE OF 366 TERMS · FREE · NO SIGNUP

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

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Slow-moving stock is inventory that sells, or is used, much more slowly than the rest, often identified as lines with no movement for six or twelve months. Accounting standards carry stock at the lower of cost and net realisable value, so it should be written down when it will sell below cost, though owner-managed businesses often leave this late. A lender advancing against stock excludes it or applies a lower advance rate, and reads a rising share of it alongside inventory days, because stock that is not moving is usually the first part of a balance sheet to be worth less than its book value.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

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