Financing & Factoring Distributors
0.69% to 1.59%
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Distribution companies come to us for funding because they:
What Is Invoice Factoring for distributors?
Invoice factoring for distributors is a financial service that allows distributors to improve cash flow by selling their accounts receivable (invoices) to a third-party company, known as a factoring company or factor. This enables distributors to get immediate access to funds instead of waiting for their customers to pay their invoices, which often takes 30 to 90 days or more.
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Distribution companies can use the cash advance from factoring to:
Purchase Larger Inventory
Benefit from Supplier Discounts
Support Seasonal Demand
Distribution companies can use the cash advance from factoring to:
Purchase Larger Inventory
Benefit from Supplier Discounts
Support Seasonal Demand
Supply Chain Finance Solution for Distributors and Re-Sellers
Distributors are often faced with the need to add more to their capital to satisfy their increasing purchase orders. 1st Commercial Credit offers very simple cash flow solutions that can be set up in a matter of days.
"We utilize the financial strength of your customer in establishing your invoice factoring credit line. Once we establish your account, you will have access to other distribution financial tools we offer."
We can assist your business with our accounts receivable financing and supply chain finance solutions. Because of the flexibility that we offer, you will be able to take your company’s capacity to the next level.
1st Commercial Credit offers three major financial solutions distributors need.
- Invoice Factoring allows to advance funds for delivered merchandise and monitors the credit of the incoming payment stream.
- Purchase Order Financing allows additional working capital for recurring purchase orders. This includes light assembly or repackaging onsite.
- Trade Payable Credit to pay suppliers early with extended payment terms. Provides great value for suppliers and eliminates the need for letters of credit.
Distributors Leverage Accounts Receivable Factoring
For distribution companies, managing cash flow can be a significant challenge, especially when dealing with long payment cycles
Accounts receivable factoring is a valuable financial tool for distributors looking to enhance their cash flow, support business growth, and take advantage of new opportunities. By leveraging this solution, distributors can keep their operations running smoothly and stay competitive in a challenging marketplace.
Everything starts with the quality of your customers, financial strength and recurring sales.
Distribution facilities that need to offer credit terms to customers utilize our funding program. Distributors can easily tap into their receivables asset for immediate cash flow. You may offer credit terms to new and larger customers at an affordable cost, take advantage of early pay discounts offered by your suppliers, buy larger quantities with additional discounts, and countless other opportunities that your distribution business is missing out on.
Advantages Of Our Invoice Factoring Services For Distributors
1st Commercial Credit can set up your account within 3 to 5 working days for receivable factoring.
There are plenty of reasons why 1st Commercial Credit stands out from all other financial institutions. Our offers put your interest above all else.
- We offer higher credit limits than banks.
- Decisions are made the same day.
- Fast funding under $350,000.
- We do not require facility fees or ongoing audits.
- No up-front fees to set up.
Bring In Money Without Taking On New Debt
1st Commercial Credit facilitates accounts receivable loans for distributors and resellers. We work with small and medium-sized businesses in a wide range of industries.
Our commercial finance team will structure a unique quick funding solution based on your industry-specific needs. We provide cash flow lending solutions and work with start-ups, companies in the growth phase, companies undergoing mergers and acquisitions, and financial struggles. 1st Commercial Credit is a factoring company striving to provide companies the best guidance and business lending services.
Wholesale distribution is a crucial link in the supply chain that connects manufacturers with customers. The distribution business is a very complex business that involves the movement of products, which requires flexibility and fast response times to remain operating at the highest levels in the industry. To keep such high levels while continuing to grow, a reliable and healthy cash flow is needed. Companies can access this cash through distributor financing.
Having to wait for a customer to pay an invoice sold in payment terms (30, 60, or 90 days) can certainly be a limiting factor when considering growth opportunities. Invoice factoring offers an ideal financial solution to alleviate these cash shortages. In addition, 1st Commercial Credit can also provide inventory financing for distributors in the country.
In contrast to traditional forms of financing, distributor invoice factoring does not involve a lengthy application and approval process. Setting up an invoice factoring account is a simple process. After completing the application, the account is generally approved within 3 to 5 business days.
Although credit scores are not required, the factoring company will still review the business’ invoice process and financial management. It will also run credit background checks of the business’ customers. The only factors affecting eligibility include having any outstanding tax liens or other financial impediments.
Our Invoice Factoring Services Beat Traditional Financing
Many small distributors have a difficult time accessing traditional sources of financing like bank loans. In many cases, banks won’t lend to smaller distributors experiencing uneven cash flow. On the positive side, the last thing a business with irregular cash flow needs is additional debt obligations. For these reasons, an alternative form of financing, such as invoice factoring, is quickly becoming the preferred option for distributors and wholesalers.
1st Commercial Credit’s factoring services will provide you with:
- Quick Funding: Available cash when your company needs it.
- Cash Flow: Access to a healthy and reliable source of cash
- Support: The team at 1st Commercial Credit will support your business and provide high-quality customer service.
Your distribution and wholesale business will be receiving the following benefits:
- Flexible and accessible funding
- Quick cash
- A financial safety net
- Business opportunities
- Confidentiality (Non-notification option available)
How To Receive Funds with Invoice Factoring?
How Can Inventory Financing Companies Help Distributors And Resellers?
Inventory financing acts as a short-term loan or line of credit for businesses, allowing them to purchase inventory upfront for future sales.
The purchased inventory will be used as collateral. Inventory financing is commonly used to build up a company’s product inventory for peak seasons with high demands, take advantage of purchase discounts, and meet growing sales demand.
The financing company will want to be assured that you can make consistent loan payments from profits on your ongoing inventory turnover through high sales volumes. This form of financing benefits all aspects of the business, including packing, project design, factory production, shipping, and delivery of inventory to its destination.
Some manufacturers rely heavily on inventory finance to ensure their capability to produce the necessary product volumes to satisfy their clients. As a result, buyers will often favor manufacturers that use a reliable source for lending for production and inventory.
A reliable asset-based lender will finance many types of inventories. The requirement that the products are proven to be popular among consumers in the current market.
Inventory financing is often used by wholesalers, retailers, and manufacturing companies to accumulate inventory. The interest rates to borrow money are lower than unsecured debt because inventory is used as collateral. Some companies enjoy the benefits of paying their supplier right away or having a longer manufacturing process. Inventory financing can also be used to expand product lines and keep popular products stocked, so the business does not have to reduce investments in other company areas to purchase inventory.
Distribution Factoring Cost (Rates and Fees)
When considering factoring services for your distribution company, understanding the costs involved is crucial. At 1st Commercial Credit, our rates are designed to be competitive and transparent, ranging from 0.69% to 1.59%. These fees reflect the flexibility and speed of cash flow solutions we provide, ensuring that you can access the funds you need quickly without hidden costs. Whether you need immediate capital to cover payroll, manage supplier payments, or seize growth opportunities, our factoring rates offer a cost-effective way to enhance your business's financial stability.
FAQ About Distributors and Factoring
No, factoring does not affect your credit score. Since it's not a loan, it doesn’t involve a credit check on your business. The factoring company assesses your customers’ creditworthiness, not yours.
Absolutely. Factoring gives you the financial flexibility to accept larger orders or customers by providing immediate cash flow. This allows you to confidently offer extended payment terms without impacting your operations.
Most distributors and wholesalers who sell goods on credit terms to other businesses (B2B) can qualify for factoring. The main qualification is the creditworthiness of your customers, making this option accessible even if your own business has a limited credit history or is in a growth phase.
Yes, your customers will be informed that their payments are being directed to the factoring company. We ensure the process is handled professionally, so your customer relationships are maintained. In many cases, the transition is seamless, and customers see it as a routine part of business.
