Wholesale Distributors: Cover Slow Payments with Business Credit

Last Updated on October 5, 2018

Slow customer payments can cause cash flow problems for wholesale distributors. With a business credit line, you can bridge slow customer payments, and get the working capital you need in advance of future orders.

But what type of credit line is right for you and your business?

wholesale distribution credit used for bridging slow payments

Jump To:

  1. 2 Best Business Credit Lines for Wholesale Distributors
  2. Does Your Distribution Company Qualify For
    AR or Revolving Business Line of Credit?
  3. How Long Does a Business LOC Take to Fund?
  4. How to Get a Wholesale Business Credit Line

2 Best Business Credit Lines for Wholesale Distributors

Type 1: Accounts Receivable Line of Credit: 

The most popular type of credit line for wholesale distributors. With AR financing, you can turn your receivables into I.O.U.s. Leverage your customer orders in exchange for cash. You can use this capital for virtually any distribution use.

Boost your inventory, cover material purchases, and manage cash flow – all without having to wait for customer payments!

The most popular feature of AR financing among wholesale businesses is the fact that you don’t have to notify your customers that you’re leveraging their invoices.

Although most retailers have grown used to distributors using this method of financing, many business owners still worry about protecting their company name.In these cases, AR credit lines are the perfect financing option to bride customer payments.

Type 2: Revolving Business Line of Credit

You can’t count on sporadic customer payments to cover expenses between filling orders. When you find yourself needing working capital for anything from materials, to covering labor costs, and managing payroll, revolving credit lines are often the best choice for wholesale distributors.

With a revolving business line of credit, you only have to pay for what you need. Take any amount you wish at any given time from your credit line. Cover exactly the amount of expenses you need for future invoices.

You can then replace the amount you withdrew, or keep taking from your credit maximum as needed. You can do this as often or as infrequently as you like. Any funds you don’t use will always be available to you, preparing your wholesale business for any opportunity that comes your way.

The flexible terms and assurance of never over-borrowing and paying for supplies you’ll never use make this a perfect option for wholesale distributors. What’s more, this is a form of unsecured financing, meaning there are no collateral requirements.

Protect your assets, and get what you need to grow!

Does You Qualify For AR Financing or Business Lines of Credit?

AR Credit Line Requirements for Wholesale Distributors

To get an accounts receivable credit line, businesses must do at least $40K in monthly accounts receivables. Distributors must also be in business for at least 6 months.

There is no minimum credit score required to get AR financing. No up front fees, personal guarantees or real estate collateral is needed to be leveraged.

Revolving Line of Credit Requirements for Distributors

Businesses must be doing a minimum of $10K in monthly gross sales, and be in business for 6 or more months to qualify.

Like AR financing, revolving credit lines do not have a minimum FICO requirement.

In addition, revolving business lines of credit with no collateral or personal guarantees are needed for approval.

How Long Does a Business LOC Take to Fund?

You can get funded with a credit line in as little as 24 hours. Our wholesale financing options are made for easy approval, and immediate funding.

This is often many times faster than bank funding processes, due to an expedited, streamlined approval process that requires less paperwork, and more help with document preparation services.

How to Get a Wholesale Business Credit Line

If you’re still deciding which type of credit line would be best for your business, call our expert Business Financing Advisors at (877) 482-3008.

With over 10 years of experience in helping wholesale distributors bridge gaps in cash flow, they can help you find the perfect financing option for your needs.

Need cash immediately? To get the ball rolling and receive funds in as little as 24 hours, fill out our application online. It only takes a minute!

We can’t wait to see how we can help you get the funds you need to grow.

National Business Capital is the #1 FinTech marketplace offering small business loans and services. Harnessing the power of smart technology and even smarter people, we’ve streamlined the approval process to secure over $1 billion in financing for small business owners to date.

Our expert Business Financing Advisors work within our 75+ Lender Marketplace in real time to give you easy access to the best low-interest SBA loans, short and long-term loans and business lines of credit, as well as a full suite of revenue-driving business services.

We strengthen local communities one small business loan at a time. For every deal we fund, we donate 10 meals to Feeding America!


About the Author, Matt Carrigan

Matt Carrigan is the Content Writer at National Business Capital & Services. He loves spending every day creating content to educate business owners across every industry about business growth strategies, and how they can access the funding they need!

Disclaimer: The information and insights in this article are provided for informational purposes only, and do not constitute financial, legal, tax, business or personal advise from National Business Capital and the author. Do no rely on this information as advice and please consult with your financial advisor, accountant and/or attorney before making any decisions. If you rely solely in this information it is at your own risk. The information is true and accurate to the best of our knowledge, but there maybe errors, omissions, or mistakes.