How to Grow your Distribution BusinessDistributors are often left in a tight spot between their suppliers and their customers in their sales process. As a distributor, you need to get your product from the manufacturer to the seller – and you need to pay the manufacturer for those goods. However, you are stuck in the middle of these two parties because you are waiting for your clients to pay you. Sometimes you might even have to wait until your customers sell all the product before you are paid.

This scenario can have a large impact on your business, especially if you need to turn down new clients because you are waiting for your own invoices to be paid before purchasing more inventory. Depending on the payment terms that distributors can negotiate with their customers, they can often wait 30, 60 or even 90 day for their invoices to be paid.

Waiting for payment creates a cash flow gap that puts a strain on a distributor’s operating expenses. If you had access to the money now, you could pay all your monthly expenses as well as focus on growing your distribution business. You may want to order more inventory, work with customers who require longer payment terms, reach out to new potential customers, or hire more staff. This is where distribution factoring services come in.

Factoring your accounts receivable gives you a fast and easy way to get an advance on your invoices. Applying for factoring services is also quick and easy. You can read about different factoring companies and look for some that work with distributors and know your industry and business model. After you request a factoring rate quote and learn more about the process and the company, the factoring company professionals can guide you through the application process. The factoring company will look at the creditworthiness of your customers and once you’re approved, you can typically get an advance on your first batch of invoices within 24 hours – and even quicker after that.

With factoring, you can grow your distribution business by paying your suppliers with the factoring company’s funds. Interstate Capital, founded in 1993,l partners with distributors across the continent to help them grow and expand their business. Contact Interstate Capital for an instant factoring rate quote today.