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Logistics and Distribution Financing
Distributors sit in the middle of the supply chain: paying suppliers up front while extending payment terms to customers. Growth means more inventory, more receivables, and often more warehouse space — all of which require capital before the revenue arrives.
Common cash flow and capital challenges
- Paying suppliers before customers pay you
- Large customer payment terms (net-45 to net-90)
- Warehouse equipment like forklifts and racking
- Facility expansion as volume grows
Financing that may suit this industry
Receivables Financing
Advances against invoices to large customers while you manage collections.
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Purchase Order Financing
Pays suppliers for a large confirmed customer order.
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Equipment Financing
For forklifts, racking, and warehouse automation.
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Business Lines of Credit
Covers recurring inventory purchases.
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Practical use cases
- Fulfilling a big-box retailer order
- Adding warehouse racking and forklifts
- Bridging customer payment terms during rapid growth
Eligibility considerations
- Customer creditworthiness matters for receivables and PO financing
- Inventory turnover and supplier reliability may be reviewed
- Customer concentration can affect review
Typical documentation
- Accounts receivable aging
- Customer purchase orders
- Supplier agreements
- Financial statements
- Business bank statements
Cost and repayment considerations
- Receivables financing requires ongoing reporting
- PO financing costs should be weighed against the order's margin
- Factor in how long goods sit before shipping
Alternatives and trade-offs
Supplier credit
Extended supplier terms can reduce the amount you need to finance.
Invoice factoring
Similar to receivables financing, but the factor typically collects from customers.
Frequently asked questions
What's the difference between receivables financing and factoring?
With receivables financing, you usually keep the invoices and collections. With factoring, you sell the invoices and the factor typically collects from your customers.
Related guides
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LendNova LLC is a referral partner, not a lender. Availability, eligibility, rates, and terms are determined solely by independent funding sources. This page is general information, not financial advice.