Wholesale Distribution Merchant Cash Advance & Business Funding
Wholesale distribution financing when customers pay on net terms.
Who should read this: wholesalers, distributors and importers, and brokers with those files.
How does customer concentration affect a distributor's file?
Big customers matter. Losing one large account can cut deposits sharply. A distributor paid mostly by two customers reads riskier than one with fifty small accounts.
That holds even at the same total. Funders look at the payer names on deposits to see how spread out revenue is.
Manufacturers face the same net-term wait, and Trucking carriers often haul for the same customers.
We're not a funder.
We don't fund deals ourselves. We shop yours with funders who do, so you see more than one offer.
Only funders that fit.
Your file goes to funders that work with your industry and your deal size. Nobody else sees it.
You make the call.
Every offer comes to you in writing. Nothing happens until you pick one.
- What it costs to apply
- Nothing. Applying costs you nothing, and Afterfirst MCA charges you no fee.
- Credit
- Ask us how each funder checks credit before you agree to anything.
- Speed
- We call you back and talk with you before your file goes to any funder.
- Offers
- Every offer shows the total payback, the payment amount, how often it comes out, and the term.
Customer payments in a wholesale distribution financing file
Funders read customer payments by name, amount and timing. They look for steady payers and the share each one makes up.
Late or shrinking payments from a large customer draw attention.
Customer names on ACH and wire deposits
ACH and wire deposits usually show the paying company's name. Funders tally revenue by payer to judge concentration.
A big customer stretching net-30 to net-60
When a large customer stretches from net-30 to net-60, deposits drop for a month before recovering. The statement shows a gap that is really a delay.
Showing the money is late, not lost
A note with the customer's recent payment dates and the open invoices shows the money is late, not lost. An aging report supports it.
Open invoices by customer and days outstanding
An aging summary lists open invoices by customer and days outstanding. Funders use it to see when the gap should close.
Credit memos that shrink a payment
A customer that takes a credit memo pays less than the invoice. Note the memo so the smaller deposit reads as settled, not short.
Why do net terms create a funding gap?
Net terms create a gap. The distributor pays suppliers soon, often up front. Then it waits thirty to sixty days or more for customers to pay.
A growing distributor feels this more, since each new order widens the gap. An advance bridges that wait. For a gap that keeps coming back, factoring or a line of credit often costs less.
A distributor already paying one advance is shopped as a Second position. Factor rate vs APR shows why a short term against slow payers costs more than it looks.
The debit side of a distributor statement
Most debits are large, uneven wires to suppliers and freight carriers. A single supplier wire can exceed a week of deposits. Funders read them alongside the deposits that follow to confirm the stock turns into sales.
Distributor questions
Is invoice factoring better than an advance for a distributor?
Factoring can cost less for a gap that keeps coming back. It pays against specific invoices. An advance can fit when the need is one-time or factoring is not available. Compare both in dollars.
Does it matter who a distributor's customers are?
Funders look at payer names on the deposits to judge concentration and reliability. Well-known customers who pay on time help your file. A single dominant customer adds risk.
Can a distributor use an advance to take a large order?
Yes, filling a large order is a common use when the customer's payment terms fall within the advance term. The funder may ask for the purchase order. Confirm the customer's payment timing first.
Sources
- The U.S. Census Bureau's Monthly Wholesale Trade report gives monthly sales and stock levels for wholesale firms. Use it as a benchmark for any wholesale distribution financing request built around stock.
Afterfirst is not a funder; all offers are subject to funder underwriting.
Cost, credit, speed and stacking
Cost
Credit
Speed
Stacking
Which months are slowest in this industry?
This table shows how many people private wholesale trade (NAICS 42) businesses employed each month, as an index where the year's average is 100. It comes from the Bureau of Labor Statistics Quarterly Census of Employment and Wages, the most recent full year available. Staffing is a stand-in for how busy a business is. Deposits can move more or less than headcount, so read it as the shape of the year, not your numbers.
| Month | Staffing index (average = 100) | |
|---|---|---|
| January | 100 | |
| February | 100 | |
| March | 100 | |
| April | 100 | |
| May | 100 | |
| June | 100 | |
| July | 100 | highest |
| August | 100 | |
| September | 100 | lowest |
| October | 100 | |
| November | 100 | |
| December | 100 |
The low point is September at 99.6 and the high point is July at 100.4, a swing of 0.8 points. Wholesale staffing barely moves; the gap to plan for is between paying suppliers and collecting from customers.
| Quarter | Total payroll index (average = 100) |
|---|---|
| Quarter 1 | 106 |
| Quarter 2 | 94 |
| Quarter 3 | 96 |
| Quarter 4 | 103 |
Payroll by quarter can rise at year end for reasons like bonuses and overtime, not only more work.
Example: say a business like this deposits $75,000 in an average month and pays a fixed $7,500 a month, 10% of that. If deposits tracked the payroll index, Quarter 2 at 94 would bring in about $70,500, and the same payment would take 10.6% of it. Plan the payment on that quarter, not on Quarter 1 at 106.
Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages.
Which funding options fit wholesale distributors?
Each page runs one option against this industry's slow months.
Business line of credit for wholesale distributors
A draw sized for a slow month, repaid in thirds, with the interest on the balance worked out.
MCA consolidation for wholesale distributors
One payment in place of two, with the share of deposits before and after in a slow month.
Send one file.
See what fits.
Call 877-FUND-654 with questions.