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Distributor Financing

Distributor Financing: Benefits of Factoring Invoices

Invoice factoring allows distributors to free up the working capital that would otherwise be tied up in their 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 us.

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.
  • Use the distributor invoice factoring calculator to find out how much working capital you could access by factoring invoices, instead of waiting for customers to pay.

Using Receivables Financing as a Distributor Financing Solution

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.

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.

This is exactly the type of supply chain finance scenario that makes invoice factoring a useful distributor financing tool!

3 Comments

  1. Whitney says:

    It works really well for me

  2. Antwan says:

    Thanks for the wonderful article

  3. Ryan says:

    It works really well for me

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