Business funding for wholesale and distribution businesses
Wholesalers and distributors buy inventory ahead of demand and then bill business customers on 30, 60 or 90 day terms, which means cash is often tied up in a warehouse or in unpaid invoices at the same time. Invoice factoring and a line of credit are usually the first tools to look at here, since they match the actual timing problem better than a lump-sum loan.
- One application, several lenders
- No credit pull to see your options
- No fee to you, ever
Common funding needs
- Buying inventory ahead of a seasonal order or new account
- Getting paid faster on invoices to retailers or other businesses
- Covering warehouse rent and payroll between order cycles
- Financing a forklift, racking or warehouse equipment
What usually fits
Products that usually fit
- Invoice factoring to get paid on shipped orders now instead of in 30 to 90 days.
- Line of credit for inventory purchases ahead of a big order.
- Working capital for payroll and warehouse costs between cycles.
- Equipment financing for forklifts and warehouse equipment.
Compare term loans, lines of credit, cash advances and equipment financing side by side →
Illustrative example
A worked example
A distributor has $60,000 in invoices out to retail customers on 60-day terms. Factoring at an illustrative 88% advance puts about $52,800 in the account within days; the remaining $7,200 is paid once customers settle, minus a fee, illustratively 2-5% for the period outstanding.
Separately, drawing $30,000 on a line of credit to stock inventory ahead of a seasonal order, repaid over 4 months at an illustrative 10-20% a year, costs roughly $1,000-$2,000 in interest.
Illustrative example only, not an offer or a quote. Rates, fees and terms are set by each lender and depend on your business. Fees are not included unless stated.
Underwriting
What lenders look at
- Who your customers are and their typical payment terms
- Inventory turnover and how long stock sits before it sells
- Monthly bank deposits
- Age and value of warehouse and handling equipment
- Owner credit and time in business
Honestly
Who this is not for
- A distributor with no invoice or purchase order history yet
- Factoring invoices from customers who dispute often or pay very late
- Borrowing short-term money to carry inventory that is not turning
If borrowing does not make sense, we will say so.
Are you a match?
Lender network minimums
Close but not quite there? Apply anyway and we will tell you honestly what is possible.
*Best available terms from lenders in our network. Every lender sets its own criteria; approval, amount and funding time are decided by the lender and not guaranteed.
| Time in business | 1 year+ |
|---|---|
| Monthly bank deposits | $20,000+ |
| Credit score | 500+ |
| Bank account | Business |
| Fee to you | $0 |
| Credit pull to start | None |
FAQ
Wholesale & distribution funding questions
Is factoring only for large distributors?
No, factoring companies work with smaller wholesalers too, as long as your customers are other businesses with a payment history.
Can a line of credit fund a big seasonal inventory buy?
Yes, that is a common use, drawn ahead of the season and repaid as the inventory sells.
Do you finance a forklift or racking?
Yes, through equipment financing, usually with the equipment as collateral.
What matters most to lenders here?
Who your customers are, how reliably they pay, and how steady your deposits and order volume are.
Guides
Guides for wholesale & distribution
Related
Similar businesses
Manufacturing · Agriculture · Franchises
Where we work: all US states · all Canadian provinces
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