Distributors buy goods, store them and deliver them, then wait for customers to pay. Working capital covers the stretch between the purchase order and the payment.
Apply Now →A wholesaler or distributor stands between producers and retailers, restaurants or contractors. The business model rewards volume, and it requires carrying two things at once: inventory on the shelf and invoices owed by customers. A supplier may expect payment in a few weeks, while customers pay in 30 days or more.
When both clocks run, cash goes out faster than it comes in. Every new account makes the distributor bigger and the gap wider. That is why fast-growing distributors can feel cash-poor even as sales climb.
| Cash use | Why it comes first |
|---|---|
| Bulk purchases | Larger orders from suppliers lower per-unit cost |
| Freight in | Shipping from the producer is paid when goods move |
| Warehouse and storage | Rent, racking and handling equipment are monthly costs |
| Delivery vehicles and drivers | Routes run every day whether customers have paid or not |
| Sales staff | Reps are paid long before the accounts they open mature |
Distributors serving New York City and the surrounding metro areas deal with tight delivery windows, narrow streets, limited loading space and heavy traffic. Many make multiple small deliveries per day to restaurants, shops and offices. That means more trucks, more drivers and more fuel per dollar of goods than a long, simple route. Food and beverage distributors face additional spoilage and refrigeration costs, while distributors of building supplies deal with heavy items and job-site schedules.
Product mix matters. Fast-turning staples free cash quickly. Slow movers sit on the shelf and absorb it.
Distributors set credit terms customer by customer. A reliable account that pays on time can be offered 30 days, while a newer shop may need a shorter leash. Returns, damaged goods and short shipments complicate the books, and disputed invoices can sit unpaid for weeks. A distributor with a few large customers faces concentration risk: if one pays late, the whole month's cash plan shifts. Spreading sales across more accounts steadies cash, but opening accounts takes sales time and delivery capacity.
For illustration only: a distributor lands a chain of restaurants requiring weekly deliveries. The first month needs about $60,000 of extra inventory, a second delivery van and a driver, while the chain pays on 45-day terms. The distributor funds the stock and operating costs for six or seven weeks before the first payment arrives. Working capital bridges that. The question is whether the margin on the new account, across its life, clearly beats what funding costs. Check the customer's payment history before committing the purchase.
The application takes about five minutes with a soft credit pull. We review about three months of business bank statements and no tax returns are required. FICO 500 and above is considered. Funding runs from $25,000 to $5,000,000 and can arrive in as little as 24 hours after approval. Sole proprietors and owner-operated distribution businesses can apply.
Inventory and delivery costs are paid before customers pay their invoices, so each new account widens the gap.
Yes. Sole proprietors can apply. We review about three months of business bank statements and do not require tax returns.
Bulk inventory, freight, delivery vehicles, warehouse equipment and payroll. Funding runs from $25,000 to $5,000,000.
Compare the margin over the account's life with what you would owe back, and check whether the customer pays on the terms they promise.
The application uses a soft credit pull, and FICO 500 and above is considered.
Three months of business bank statements and a 5-minute application. FICO 500+ considered. $25,000 to $5,000,000, funded in as little as 24 hours.
Apply Now →It takes about two minutes and it will not affect your credit score.
No obligation • No impact to your credit score
