The cash-flow challenge in distribution
Distributors buy inventory upfront and extend credit to retailers, squeezing cash between both ends.
Customers in this sector typically pay in 30–60 days from retailers and resellers. That gap is not a sign of a badly run business — it is simply how the sector trades, and it is why so many distribution companies hit a ceiling that has nothing to do with demand.
How purchase order financing solves it
A combined PO + AR facility funds supplier purchases and then advances on the resulting invoices.
PO financing is built for product businesses — distributors, wholesalers, importers and government resellers — that win orders larger than their working capital. It lets you say yes to growth instead of turning down the biggest contract of the year.
Because approval rests on your customers' creditworthiness rather than your own balance sheet, newer distribution companies and those rebuilding credit qualify on the same basis as established firms. Facilities run from $25,000 to $25 million and grow as your invoicing grows.
What distribution clients use funding for
- Inventory buys
- Supplier deposits
- Large retail orders
- New product lines
Who qualifies
- You resell finished goods (no heavy in-house manufacturing)
- Confirmed, non-cancellable PO from a creditworthy customer
- Gross margin of roughly 15% or more on the deal
- Reliable supplier with a delivery track record
What Distribution businesses need to apply
Applying takes about ten minutes. Most Distribution companies already have everything on this list, and nothing here affects your personal credit score.
- The confirmed, non-cancellable purchase order from your customer
- Your supplier's quote or pro-forma invoice
- A cost breakdown showing your gross margin on the deal
- Articles of incorporation and your EIN
- Supplier references or a delivery track record
Why it pays to move now
The cost of waiting is rarely just interest. It is the contract you could not staff, the order you could not fill and the supplier discount you could not take. Purchase Order Financing converts work you have already delivered into cash you can deploy this week.
