Distributor Financing - Invoice Factoring for Distributors

Distributor Financing – Expedite cash flow by factoring invoices instead of chasing payments.

The same challenges that affect other B2B organizations also drive the need for supply chain finance — having the ability to take on new business, take advantage of manufacturer discounts for large purchases or purchase inventory needed to satisfy larger clients are just a few of the times when a distribution company might be looking for a supply chain finance tool.

Distributors that factor invoices eliminate the weeks – or months – they might otherwise spend waiting for customers to pay. They can focus on growing their business instead of chasing down customer payments.

When businesses in the supply chain factor invoices (manufacturers, distributors, logistics, etc.), supply chain factoring companies fund an advance on the invoice almost immediately. This puts working capital into the hands of the distributors and manufacturers so they can stay focused on running and growing their operations.

Even if you are already factoring invoices, we encourage you to apply for a free, no-obligation invoice factoring proposal so you can make sure you have the best factoring agreement in place for your distribution business. We offer distributor factoring solutions with:

Low factoring fees – as low as 5% (or even lower!)
High advances on factored invoices
No long term contracts or hidden penalties
Fast funding
No cost to apply and no hidden fees
No monthly minimums – factor when you choose
Non-recourse supply chain factoring means less financial risk for your business
Non-notification invoice factoring – white-labeled to your business

With no long term contracts, it’s up to us to earn your on-going business by providing you with a consistently high level of prompt, professional customer service from a knowledgeable account manager. You’ll have the peace of mind of knowing you’re working with someone who understands and appreciates the unique needs of your business.

GET A FREE, NO-RISK QUOTE

Supply Chain Finance – Expedite cash flow using invoice factoring as a distributor financing solution, with low fees and competitive advances.

2. FACTOR INVOICES

Go from approval to your first funding in as little as 24-48 hours — or even faster.

3. SPEED UP CASH FLOW

Create a more consistent stream of working capital that keeps pace with operational needs.

Distributor Financing Scenario Using Invoice Factoring

The Dynamic Distribution Company decided to grow its customer base by adding product lines from a manufacturer that has strong consumer demand. The manufacturer requires all new distributors to carry their whole line of products and to commit to selling through a set number of introductory retail starter kits within 90 days of launch.

The Dynamic Distribution Company wants to take advantage of the manufacturer’s 8% discount on accounts paid upon receipt of delivery rather than extended terms. After exploring supply chain finance options, they decide to use our distributor financing tool and start factoring invoices.

Working capital in hand, they are now free to take advantage of the manufacturer’s discount. Here’s how the process works:

They factor an accounts receivable invoice from one of their customers for a small fee (called a factoring fee) and get fast funding on an advance of 95% of the face value amount.

The total cost of factoring – or factoring fee – is less than the amount of money they save by paying the manufacturer right away instead of on terms, resulting in a net financial gain for the distributor

Contact us to request more information about distributor financing options by completing a quote request. Get answers to your questions about distributor financing in 24-48 hours, or even faster. When approved to factor invoices, get your first funding and start unlocking working capital in as little as 3-5 business days.

Invoice Factoring Calculator

Use the factoring calculator below to discover how much working capital you could unlock by factoring receivables instead of waiting weeks – or months – for customers to pay you.

Find out whether factoring receivables could help your distribution business grow faster:

Distributor Financing – Benefits of Factoring Invoices

Invoice factoring allows distributors to free up working capital that would otherwise be tied up in accounts receivable invoices. Instead of waiting for customers to pay, they can receive an advance on their customer’s invoice on the same day it is generated, when they factor it with an invoice factoring company.

Capital in hand, distributors are then free to put the money back into growth initiatives; such as:

Reinvesting more quickly in the inventory needed to take on new business or attract more customers
Adding new product lines to expand their customer base
Making large inventory purchases to satisfy orders of larger clients
Taking advantage of volume discounts or negotiating better payment terms with their suppliers – and more

Working capital freed up by invoice factoring can also be used to improve cash flow needed for operational expenses, equipment purchases and repairs, expansion and other capital expenditures.

How the Distributor Factoring Process Works

Invoices factored are typically funded within 1-2 business days (or even faster) – up to 95% of the face value of the invoice, with low to no holdbacks. If you were billing a customer in the amount of $6,500 but wanted to access the funds without waiting weeks – or months – for your customer to pay.

Assuming a factoring fee of 5%, and an advance rate of 95%, here’s how it would work:

Day 1 –	Generate $6,500 client invoice and factor it
– 1-2 Days	Your company receives 95% advance of $6,175 by wire transfer or ACH
	Factoring company earns 5% factoring fee of $325
Day 30+	Factoring company waits on the customer payment while you stay focused on your distribution business

Distributor Financing Solutions that Expedite Cash Flow

Cash flow is critical to every type of business, including U.S. distributors who make it possible for all kinds of goods to get to retail stores, e-commerce retailers and other points of sale.

Similar to other businesses that wait for their customers to pay via accounts receivable invoices, distributors can also experience cash flow challenges that have the ability to derail their growth.

Distributors often extend payment terms to their own customers of 30, 60, 90 days (or even longer). However, these same distributors may be required to pay manufacturers up front, and must bear the cost of transporting goods in advance of customer payment. In many cases distributors are required to pay their suppliers right away, rather than on terms.

Speeding up cash flow to keep pace with expenses and provide working capital for growth makes distributor factoring an ideal supply chain finance tool.