Restocking after a flood, fire or theft: funding stock fast

Empty shelves cost more than the stock that used to be on them. Every week without product is a week customers learn to shop somewhere else. After a flood, fire, storm or break-in, getting the right stock back quickly is one of the most important things a retailer, wholesaler or hospitality business can do.

This page covers the evidence, the tax, the order to restock in, and how to fund it.

What should you do before restocking?

Getting paid for what you lost depends on what you record now:

1. Photograph and video everything — shelves, pallets, cool rooms, the water line or fire damage.
2. Count and list it — product, quantity, cost price, and where it was. Your POS or inventory system can help reconstruct quantities.
3. Notify your insurer and, for theft, the police. Note the report number.
4. Ask before disposing of high-value items. Food and hygiene rules may require prompt disposal of perishables — record it first.
5. Keep disposal receipts and any removal costs.

Our guide to documenting damage for insurance goes into detail.

Which stock should you replace first?

Not all stock is equal. Rank your lines by:

Priority	Stock type	Why
1	Fast movers and daily essentials	They bring customers back through the door
2	High-margin lines	They rebuild cash fastest
3	Items with committed orders	Keep promises to existing customers
4	Seasonal stock with a short window	Miss it and you miss the season
5	Slow movers and range fillers	Add back once cash allows

A partial range that’s open this week usually beats a full range in six weeks.

How does the ATO treat lost and replaced stock?

According to the ATO’s guidance on trading stock damaged or destroyed by a natural disaster:

• Insurance payouts for lost or damaged trading stock are assessable income.
• The loss flows through your year-end stock valuation, reducing assessable income or increasing deductions.
• You must do a year-end stocktake if your stock value varies by more than $5,000 during the income year.
• You can claim the cost of disposing of damaged stock and of moving stock to protect it from a disaster.
• Replacement stock is deductible under the usual rules.

Timing can bite: a payout in one year and restocking deductions in another. Your accountant can help — and our page on tax on disaster payouts and grants has more.

Why is restocking so cash-hungry?

After a loss, restocking costs often run ahead of the money coming in:

• Suppliers may want payment on order, especially new ones — see supplier failure.
• Minimum order quantities can force larger purchases.
• Freight costs can rise after regional disasters.
• The insurance payout and any grant arrive later.

If restocking is the bottleneck, a 60-second enquiry gets a real person looking at it — there’s no credit check at that stage.

How do businesses fund restocking?

Situation	Common approach
Still trading, solid bank statements	Unsecured working capital or a line of credit, typically $5,000 to $500,000
Closed, large order, owner has property	Property-secured loan, $20,000 to $5,000,000
Payout accepted but not paid	Short-term funding repaid from the payout
Payout won’t cover full replacement	See the underinsurance gap

A line of credit suits restocking well: draw for each order, repay as the stock sells.

Illustrative example only: a regional gift and homewares store loses most of its stock in a flood three weeks before Mother’s Day. Insurance accepts the claim but will take weeks. The owner restocks the top 200 lines using an unsecured facility, reopens in time for the peak, and uses the payout to reduce the balance.

How much stock should you order at first?

It’s tempting to replace everything at once, or to hold back and order too little. A middle path:

1. Look at sales for the same weeks last year — that’s your baseline demand.
2. Reduce it for the disruption. Customers take time to return, so be conservative and use what you know about your local area.
3. Order for two to four weeks of that demand, prioritising the lines in the table above.
4. Reorder weekly as real sales come in.

This keeps cash working and shelves full without tying up money in slow lines. If a supplier insists on large minimum orders or cash upfront, build that into your funding amount. Our shutdown cash runway tool shows how long your cash lasts while trade rebuilds.

Should you tell customers you’re restocking?

Yes. A simple message — “we’re open, the essentials are back, the full range returns over the next few weeks” — brings people back sooner. Use your signage, social media, email list and Google Business Profile.

What records should you keep?

• Photos, video and your stock loss list
• Inventory or POS reports from before the event
• Supplier invoices for original and replacement stock
• Disposal and removal receipts
• Police report number for theft
• Insurance claim correspondence

Ready to fill the shelves again?

Customers won’t wait forever. If restocking needs to happen before the payout arrives, let’s size it properly.

Expect a call from a real person who’ll ask about insurance, grants and timing as well as money. We leave your credit file alone while we talk it over; nothing is checked until you decide to proceed. In a crisis you need fewer calls, not more, so your enquiry stays with one team.

Give us straight numbers — how much, what it’s for, which state, and whether property is involved — and the first call can go straight to real options. Begin the 60-second form.