Wholesale and Distribution Finance

Map the whole purchasing-to-receipt cycle

Put dates and amounts against supplier deposits and balances, freight, duties where relevant, receipt into stock, storage, customer delivery, invoice acceptance and collection. A confirmed order, stock in a warehouse and a completed sale create different evidence and risks.

Use trade finance for supplier-stage questions and invoice finance for eligible customer debts. Where several asset pools are material, asset-based lending may warrant a coordinated review.

Invoice value can shrink after delivery

Sale-or-return terms, consignment, returns, promotional rebates, settlement discounts, shortages and credit notes can reduce what the customer finally owes. Show the actual terms and history rather than assuming every sales invoice contributes its full face value.

Concentrated supermarket, retail-group or distributor customers can create sizeable receivables but also concentrated risk and deduction rights. Identify connected debtors, payment platforms and any existing supplier-led early-payment arrangement. Export debts add country, currency, delivery and contractual questions; export invoice finance needs its own assessment.

Model margin as well as the cash gap

Hypothetical order: £50,000 supplier cost plus £5,000 freight, duty and handling precedes an expected £70,000 receipt. That leaves £15,000 before finance costs, storage, overheads and tax. If returns and credit notes reduce receipts by £8,000, only £7,000 remains before those other costs. These are illustrative trading amounts, not a funding quote.

Compare the dates of the £55,000 outflow and customer receipt. Then test slower sell-through, higher freight and a delayed large customer. A facility that funds a viable order can be useful; borrowing to buy stock with no credible sale or repayment plan can deepen the problem.

Coordinate facilities before counting the cash

An existing lender may already hold security over stock and receivables. Trade, stock and invoice facilities cannot automatically be added together. Check lender priority, title, reporting and how the supplier-funded goods convert into customer debt. Do not count the same goods and invoice twice as freely available collateral.

Compare usable cash after exclusions, reserves, drawings, settlement and fees. Review service/funding charges, minimum fees, audits, guarantees, security and exit terms. A higher ceiling may release little additional cash if the same stock and invoices remain ineligible.

For seasonal demand, show last year’s stock turn and returns alongside current orders. Include slow-moving and obsolete inventory separately. Warehouse equipment repayments should remain affordable through the quieter part of the year, not only at peak dispatch volume.

Prepare a useful funding review

• Supplier deposit/balance terms, purchase orders and dated fulfilment costs
• Stock ageing, ownership, location, turn and returns/obsolescence records
• Customer ledger, largest debtor shares, payment terms, rebates and credit notes
• Accounts, seasonal forecast and every existing stock/trade/invoice facility and security

For the first enquiry, give your company, trading history, approximate turnover, amount, purpose, timing and current facilities. Best estimates are fine; say “Not sure” where needed. You do not need every document to begin. Use business-level totals and agree a secure process before sending detailed confidential records.

NBS reviews the requirement and clarifies gaps before assessing possible routes through lenders and specialist partners. The provider decides eligibility and any offer. Read the existing enquiry’s privacy notice and sharing authorisation before submission.

Wholesale and Distribution Finance: practical questions

Relevant guidance and sources

• Supplier-stage funding
• Inventory finance
• Supplier payments
• Substantial B2B debtor books