01Wholesale and distribution
Funding for wholesale and distribution.
Minimum average deposits
A distributor buys inventory, holds it, and sells it on terms, paying suppliers before customers pay. Volume is high and margin per unit is slight, which makes this the sector where the cost of funding has to be weighed most carefully against what the inventory actually earns.
02How the money arrives
What your statements actually show.
Underwriting reads your bank account, not your industry. Knowing how revenue reaches the account in this sector is what makes the difference between a file that is understood and one that is misread.
- Revenue shape
- ACH and check from trade customers on net terms, with card a minor channel. Purchasing is often on supplier terms as well, so the business sits between two credit arrangements rather than one.
- How it reads to a funder
- Numerous and moderately regular, from a spread of trade accounts. A reasonably readable profile, though the totals conceal the margin: high revenue at low markup is a different file from the same revenue at high markup, and the statements do not show the difference.
- Seasonality
- Inherited from the customer base. Food service distribution follows hospitality, building products follow construction, consumer goods follow retail's fourth quarter, usually a beat ahead of it.
03What it funds
What the money is usually for.
Not a list of everything money can do. These are the things owners in this sector actually come to us for.
- Inventory purchases, particularly where volume pricing is available
- Bridging the gap between paying suppliers and collecting from trade customers
- Warehouse space, racking and handling equipment
- Delivery vehicles and fleet
- Taking on a new line or territory that has to be stocked before it earns
Amounts run from $15,000 to $20,000,000, sized against what the account takes in rather than against what the money is for.
04Strength
What strengthens the file here.
The general list is on the qualification page. These are the things that carry particular weight in this sector.
Reads well
- A diversified customer base rather than a few large accounts
- Inventory that turns quickly, which matters more than how much of it there is
- Clean collections history, since the repayment ultimately comes from those receivables
- Supplier terms already in place, which reduce how much of the cycle needs funding
05Friction
What complicates it.
None of these is an automatic no. Each one changes what is available, and each one is better raised by you at the start than found in the statements later.
Thin margins against the cost of funding
Where markup per unit is slight, funding costs consume a real share of the gross profit on the goods it buys. The arithmetic has to be done before the funding is taken, not after. If buying the inventory does not clearly earn more than the funding costs, the honest answer is not to.
Inventory already pledged
Existing inventory or receivables financing commonly carries a blanket lien, which can rule out asset-backed funding on the same stock. Establishing it early avoids a late decline.
Slow-moving stock counted as an asset
Inventory that is not selling is discounted sharply by funders, whatever it cost. What turns is what counts.
A fact that arrives with an explanation is worked with. The same fact found in the statements is a surprise, and surprises cost you terms.
06Which product fits
Not every sector wants the same instrument.
We arrange four. These are the ones that tend to suit wholesale and distribution, and why. Which one is right for you is decided on your file, not on your sector.
Quoted per file
Asset-backed capital
Inventory and receivables are the natural security here, subject to whatever is already pledged.
How it worksRates published
Merchant cash advance
Works where trade collections are steady, provided the margin genuinely supports the cost.
How it worksQuoted per file
Bridge financing
Fits a specific buying opportunity with a known sell-through, rather than general working capital.
How it worksFind out where your file stands.
The application takes about fifteen minutes and asks for 3–6 months of business bank statements. If something on this page describes your business, say so at the start: it is the difference between a file that is read correctly and one that is read twice.