Business Loan Options for Wholesale & Distribution Companies

Business Loan Options for Wholesale & Distribution Companies
Ronis Gracie
on March 19, 2020
Read in 2 min

Wholesalers and distributors know the meaning of competitive business. When there is a dip in cash-flow, inventory, or some other kind of financial setback, companies in distribution and wholesale can lose customers quickly. It is important to keep supplies stocked to avoid losing key customers and eventually having to close the business.

If you need money to replenish inventory or perhaps pay for warehouse renovations, your wholesale distribution company may benefit from a business loan.

Business Loans for Wholesalers and Distributors

There are several financing options for distributors and wholesale companies. Your unique situation will help you decide which loan product is best for you. Think about how much you need, when you can make payments, and how you’ll be repaying your loan.

For example, a cash advance may be suitable in emergencies when your business needs quick access to money. On the other hand, a small business loan is the better option when financing a large purchase that you’d prefer to pay back slowly over time.

Some of the most popular types of loans used by wholesale or distribution companies include:

Working Capital Loans

Secured loans like working capital loans may be worth considering because the lender will allow you to pledge your income as collateral. The exact amount of collateral required is typically based on revenue.

Invoice Financing

Invoice factoring is another type of financing frequently used by distributors and wholesalers. Your lender will calculate your loan amount based on invoices that show how much your customers owe. It’s sometimes possible to get these loans within a matter of days, and interest rates are moderate. Credit does not have to be perfect for approval.

Small Business Loans

Small business loans allow distributors and wholesalers to finance money over a long period of time. Interest rates often do not exceed 10 percent. With some loans, repayment terms may be as long as 20 years. Although they’re guaranteed by the federal government, you’ll still need to go through a private lender to obtain an SBA loan.

Merchant Cash Advances

Cash advances are an option for financial emergencies when funds can be repaid quickly. Interest is usually factored in over the span of a month or two as a set fee. Income is the main criteria banks will look at when you apply for an MCA, so you may get approved even with bad credit.

Problems Getting a Loan for Your Wholesale Distribution Business?

The three biggest obstacles preventing your distribution/wholesale business from getting a loan are:

  • Not enough income: Traditional lending institutions want to see you earning at least $8,000 or more each month from your distribution/wholesale business operations.
  • Poor credit: Having good credit and fulfilling your insurance requirements for your wholesale/distribution company will make a big difference when applying for a short-term business loan.
  • Lack of business history: Without a business history of at least 6 months, your wholesale or distributor business will have trouble qualifying for a loan. You may have better luck looking at start up financing options.
Ronis Gracie Finance Journalist

A serial entrepreneur experienced with building several small companies from the ground up and consulting for many others, Ronis understands the finer points of small business financing. He’s passionate about small business & is committed to simplifying small business lending for others.

Important Disclosures. Please Read Carefully.

Persons facing serious financial difficulties should consider other alternatives or should seek out professional financial advice. This website is not an offer to lend. is not a lender or lending partner and does not make loan or credit decisions. connects interested persons with a lender or lending partner from its network of approved lenders and lending partners. does not control and is not responsible for the actions or inactions of any lender or lending partner, is not an agent, representative or broker of any lender or lending partner, and does not endorse any lender or lending partner. receives compensation from its lenders and lending partners, often based on a ping-tree model similar to Google AdWords where the highest available bidder is connected to the consumer. Regardless,’s service is always free to you. This service is not available in all states. If you request to connect with a lender or lending partner in a particular state where such loans are prohibited, or in a location where does not have an available lender or lending partner, you will not be connected to a lender or lending partner. You are urged to read and understand the terms of any loan offered by any lender or lending partner, and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you. By submitting your information via this website, you are authorizing and/or lenders and lending partners in its network or other intermediaries to do a credit check, which may include verifying your social security number, driver license number or other identification, and a review of your creditworthiness. Credit checks are usually performed by one of the major credit bureaus such as Experian, Equifax and Trans Union, but also may include alternative credit bureaus such as Teletrack, DP Bureau or others. You also authorize to share your information and credit history with its network of approved lenders and lending partners. For qualified consumers, our lenders offer loans with an Annual Percentage Rate (APR) of 35.99% and below. For qualified consumers, the maximum APR (including the interest rates plus fees and other costs) is 35.99%. All loans are subject to the lender’s approval based on its own unique underwriting criteria. Example: Loan Amount: $4,300.00, Annual Percentage Rate: 35.99%. Number of Monthly Payments: 30. Monthly Payment Amount: $219.36. Total Amount Payable: $6,581.78 Loans include a minimum repayment plan of 12 months and a maximum repayment plan of 30 months. In some cases, you may be given the option of obtaining a loan from a tribal lender. Tribal lenders are subject to tribal and certain federal laws while being immune from state law including usury caps. If you are connected to a tribal lender, please understand that the tribal lender’s rates and fees may be higher than state-licensed lenders. Additionally, tribal lenders may require you to agree to resolve any disputes in a tribal jurisdiction. You are urged to read and understand the terms of any loan offered by any lender, whether tribal or state-licensed, and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you.

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The lenders and lending partners you are connected to will provide documents that contain all fees and rate information pertaining to the loan being offered, including any potential fees for late-payments and the rules under which you may be allowed (if permitted by applicable law) to refinance, renew or rollover your loan. Loan fees and interest rates are determined solely by the lender or lending partner based on the lender’s or lending partner’s internal policies, underwriting criteria and applicable law. has no knowledge of or control over the loan terms offered by a lender and lending partner. You are urged to read and understand the terms of any loan offered by any lenders and lending partners and to reject any particular loan offer that you cannot afford to repay or that includes terms that are not acceptable to you.

Late Payments Hurt Your Credit Score

Please be aware that missing a payment or making a late payment can negatively impact your credit score. To protect yourself and your credit history, make sure you only accept loan terms that you can afford to repay. If you cannot make a payment on time, you should contact your lenders and lending partners immediately and discuss how to handle late payments.