Quick answer: Wholesale distributors most often use a line of credit to buy inventory and cover the gap until customers pay, invoice factoring to turn slow-paying receivables into cash, and a term loan to fund large purchase orders, warehouse space or delivery trucks. Established distributors can often be funded within days by a non-bank lender.
Why wholesale distributors need financing
Distributors buy in bulk and often sell on net-30 to net-60 terms, so cash is tied up in inventory and receivables. Winning a big customer or a large purchase order can require far more inventory than current cash allows.
Common uses for wholesale and distribution financing
- Bulk inventory and supplier prepayments
- Large purchase orders from new customers
- Warehouse space and racking
- Delivery trucks and forklifts
- Covering customer payment terms
- Taking early-payment discounts from suppliers
Financing options for wholesale distributors compared
| Option | Best for | Speed |
|---|---|---|
| Line of credit | Inventory and receivable gaps | 1–3 days |
| Invoice factoring | Slow-paying customer invoices | A few days |
| Term loan | Large purchase orders, warehouse, trucks | Same day to 2 days |
| SBA loan | Buying a building or business | Several weeks |
What lenders look at for wholesale distributors
Lenders look at monthly deposits, customer concentration, gross margins, receivable terms and existing debt.
What you need to qualify with Brookestone Funding
- 2+ years in business
- $30,000+ in monthly revenue
- 600+ credit score
- Recent business bank statements
Qualified wholesale distributors can borrow $10,000 to $2,000,000 with terms up to 36 months and rates starting at 8%. Complete applications submitted early in the day can be funded the same day.
Tips before you apply
- Have your purchase orders and customer terms ready.
- Know your gross margin and inventory turnover.
- Calculate whether supplier early-payment discounts cover the cost of financing.
- Compare offers on the total amount you’ll repay, not just the rate, and size the payment to your slowest month.
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Frequently Asked Questions
Can a wholesale distributor get a business loan with a 600 credit score?
Yes. Brookestone Funding works with wholesale distributors that have a 600+ credit score, 2+ years in business and $30,000+ in monthly revenue.
How fast can a wholesale distributor get funded?
Qualified wholesale distributors can often be funded the same day with a business term loan, or within 1–3 days with a line of credit, once the application and recent bank statements are complete.
How do distributors finance large purchase orders?
With a short-term business loan, line of credit or purchase order financing that covers the supplier payment until the customer pays.
Is factoring or a line of credit better for a distributor?
A line of credit is usually cheaper if you qualify. Factoring can work when you have large invoices to creditworthy customers but limited credit available.
Ready to see what your wholesale distributor qualifies for? Brookestone Funding offers business term loans, lines of credit and SBA loans from $10,000 to $2,000,000, with same-day funding available for qualified businesses. Apply in minutes, see our business loan options, or call 212-258-0602.
