Distributors frequently turn to distributors factoring, due to the nature of their business. These companies — the key link in the supply chain between manufacturers and consumers – play a huge role in our economy, but sometimes their own economic situations can be difficult. The reason: the gap between purchasing and delivering products and getting paid for them.
Distributors have shared challenges. They need ready cash to pay their workforce and maintain that elusive balance of what’s in the warehouse and what’s going out the loading dock. Yet they often have long payment terms with their customers, all of whom like to wait until products are sold before paying the distributor. Add to that mix today’s restrictive lending policies and the need for strong credit and collateral, and the challenges intensify. Many of the companies in the distribution industry are not eligible for traditional bank loans and lines of credit, no matter how strong their customer base may be.
Qualifications for Distributors Factoring
This is where distribution factoring comes in. A distributor’s qualifications for factoring are not based on their own credit history, but on the creditworthiness of their customers. When you start invoice factoring, you turn the money sitting in your accounts receivable into cash in your pocket. Unlock those funds and use them now for trying out new product lines, building your seasonal inventory, hiring needed staff and sales people who can sign more customers, or whatever you need. With Interstate Capital, you can usually get same-day payment as soon as you submit your invoices for delivered products.
As a bonus, you can use that infusion of upfront cash to take advantage of enjoy early payment discounts from suppliers and volume discounts. As you shorten your cash conversion cycle, you’ll also be improving your own credit score. Interstate Capital can also take care of collections, bookkeeping for your invoices, and other back-office tasks, saving you time to focus on growing your distribution business.
With Interstate Capital, your funding grows as your company’s revenue grows. Unlike a traditional bank loan, you don’t have to pay back a certain amount based on unknown future revenues. You are simply getting paid an advance for sales you have already made to retailers and other customer.
Whether you’re distributing perishable goods, appliances, or apparel, Interstate Capital can help you by buying your accounts receivable upfront.
About Interstate Capital
Interstate Capital has funded over 10,000 companies since 1993, making it one of the oldest and largest factoring companies in the alternative funding market. Interstate purchases nearly $1 billion dollars of invoices annually from hundreds of clients in a wide range of industries throughout North America and each client receives individual attention from a dedicated account manager. Get in touch with us so that you can learn more about the factoring programs designed for distributors of all sizes. Let us customize a program for you.