Wholesale finance that frees cash from stock and invoices

Wholesale finance covers the full trading cycle: paying the supplier, holding the stock and waiting for the customer to pay. Because each stage can last weeks, a wholesaler may be funding the same goods for several months.

Volume is the main lever. Larger orders bring better buying prices but need more cash, and margins are often too thin to absorb a delay. One slow-paying customer or a held shipment can affect the whole month.

Growth adds pressure. Winning a new retail or trade account usually means stocking up and extending credit before the first payment arrives.

• Paying suppliers before goods ship: trade finance can pay overseas or UK suppliers on your behalf, with repayment from customer receipts.
• Holding bulk stock: stock finance can release cash against goods in your warehouse or buy stock for a confirmed order.
• Waiting for customers to pay: invoice discounting suits established ledgers where you run credit control, while invoice factoring adds a collections service.
• Day-to-day swings: a revolving credit facility lets you draw, repay and draw again up to an agreed limit.

Our guide to factoring vs invoice discounting explains how to choose between the two invoice options.

Illustrative example only: actual costs depend on the lender and your circumstances. A distributor needs to pay an overseas supplier £100,000 before goods ship. A trade finance provider pays the supplier, and the distributor repays £103,000 after 90 days from customer receipts, so that cycle costs £3,000.

Lenders want to see reliable suppliers, creditworthy customers and stock that would hold its value if it had to be sold. Durable, easily resold goods are usually simpler to fund than perishable or fast-changing lines.

• Supplier track record and payment terms
• Customer spread and credit quality, including any heavy reliance on one buyer
• Gross margin per order and how exchange-rate movements affect it
• How stock is stored, insured and recorded
• Existing security and whether lenders would need to agree priorities

• Filed accounts and recent management accounts
• Aged debtor and aged creditor reports
• A stock report showing quantities, values and ageing
• Supplier contracts or pro forma invoices for the goods to be funded
• Shipping documents, such as bills of lading and commercial invoices
• Customer purchase orders and proof of insurance

• Negotiate supplier payment terms as hard as price. Even a few extra weeks reduces the funding you need.
• Credit check new customers and set limits before extending terms.
• Consider how exchange-rate changes affect landed cost, and speak to your bank or currency provider about your options.
• If you import into Great Britain, check whether postponed VAT accounting could reduce the cash you need for import VAT.
• Line up funding before taking a large order, rather than after the supplier asks for payment.

We are a commercial finance broker, not a lender. We help established limited companies, LLPs and partnerships of four or more partners in wholesale, import and distribution find suitable lenders on our panel.

Your dedicated relationship manager, a real person, is available by phone, email and chat from your first enquiry until the lender pays out. They can help you combine facilities so each lender's security is clear from the start.

We charge you no fee. We are paid a commission by the lender when the finance completes, and you can ask how much it is. Commission can differ between lenders. You can check your eligibility in about 60 seconds without affecting your credit score. Lenders run their own credit checks later, if you decide to apply, and make their own decisions.

Can trade finance pay suppliers in a foreign currency?

Many trade finance providers can pay overseas suppliers in their own currency. The exchange rate and any currency charges form part of the cost, so ask how they are calculated.

Can I protect against customers not paying?

Some invoice finance providers offer non-recourse facilities or bad debt protection, usually at extra cost and with a credit limit for each customer. Check exactly which debts are covered.

Do lenders fund perishable stock?

It is harder. Goods with a short shelf life or a fast-falling value are usually more difficult to fund than durable stock, and fewer lenders will consider them.

Can finance fund a single large order?

Often, yes. Some trade and stock finance providers fund individual transactions, particularly where there is a confirmed customer order behind them.