Compare business loans for whole and distribution companies
Warehouse distributor funded by business loan

Business loans for wholesale and distribution companies

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Get the funds you need to solidify your business’s place in the great chain of manufacturing.

As a distributor, you work hard to sell your manufacturing client’s products. And as a wholesaler, you have to stay on top of purchases and what your retailer clients want.

Maintaining stock, getting shipments out on time and effectively marketing require good employees and cash on hand. When expanding operations and replenishing stock calls for a little extra funding, we can help you nail down financing that’s right for your situation.

LoanBuilder, A PayPal Service Business Loans

Our top pick: LoanBuilder, A PayPal Service

Customizable business loans with no hidden fees.

  • Min. Amount: 5000
  • Max. Amount: 500000
  • One-time fixed fee charged over the life of the loan
  • Acclaimed customer service
  • Requirements: $100,000+ annual revenue, 1+ years in business, 600+ personal credit score

    What loan options are available for wholesale and distribution companies?

    Equipment financing and invoice factoring are two suitable options for wholesale distributors since these businesses tend to have expensive equipment and bill large invoices to customers. Below are five top financing options to consider:

    • Equipment financing.
      Much like a car loan is secured by the car you’re purchasing, equipment financing is secured by the equipment you’re purchasing. A new line or new vehicle for local deliveries? You could potentially get a low interest rate by going through a lender that specializes in equipment financing.
    • Invoice factoring.
      Sometimes retailers can’t fulfill invoices right away, leaving you with moved merchandise and a promise of payment. With invoice factoring, you sell open invoices to a third party at a slight discount, and when your client pays the full amount, it simply goes to the lender, rather than you. Because of how these loans are paid off, they may not be the best option if your retailer is on a credit plan with you.
    • SBA loans.
      A unique feature of these loans is that they’re guaranteed up to a specific amount by the Small Business Administration. SBA loans tend to come in larger amounts, up to $5 million. Keep in mind the size limitations that come with SBA loans. Typically, wholesalers must have under 100 to 250 employees to qualify as a small business with the SBA. Watch out for turnaround time which can be much longer with SBA loans than other financing.
    • General purpose business loans.
      You won’t be able to borrow as much as an SBA loan might afford, but it’s often faster to get a more typical fixed-term business loan. These loans could be a good option to quickly pay for new advertising, get a forklift fixed or make a large purchase from your distributor.
    • Business credit card.
      Should your needs demand a more flexible form of financing, a business credit card could be a better fit. Similarly to personal credit cards, some offer promotional periods and rewards. You can buy office supplies or gas and regularly pay off totals before the billing cycle ends to earn rewards without paying interest.

    Compare business loan options from top providers

    Rates last updated July 22nd, 2018
    Unfortunately, none of the business loan providers currently offer loans for these criteria.
    Name Product Product Description Min Loan Amount Max. Loan Amount Requirements
    LoanBuilder, A PayPal Service Business Loans
    Customizable loans with no origination fee for business owners in a hurry.
    $5,000
    $500,000
    Annual business revenue of at least $42,000, at least 9 months in business, personal credit score of 550+.
    LendingClub Business Loans
    With loan terms that vary from 1 to 5 years, enjoy fixed monthly payments and no prepayment penalties through this award-winning lender.
    $5,000
    $300,000
    2+ years in business; $50,000+ in yearly sales; No bankruptcies or tax liens; At least 20% ownership of your business; Fair or better personal credit
    OnDeck Small Business Loans
    A leading online business lender offering flexible financing at competitive fixed rates.
    $5,000
    $500,000
    Must have been in business for at least one year with annual revenue of $100K+. Must have a personal credit score of 500+.
    Kabbage Small Business Line of Credit
    A simple, convenient online application could securely get the funds you need to grow your business.
    $2,000
    $250,000
    Must have been in business for at least 1 year. Revenue minimum is $50,000 annually or $4,200 per month over the last 3 months.
    Lending Express Business Loan Marketplace
    $5,000
    $500,000
    At least 3 months in business and $10,000+ in monthly revenue. Your business might also qualify if it's been in business at least 6 months with $3,000+ in monthly revenue.
    National Business Capital Business Loans
    Get a large business loan to cover your financing needs, no matter what the purpose is. Startups welcome with 680+ credit score.
    $10,000
    $5,000,000
    Your company must have been in business for at least 6 months and have an annual revenue of at least $180,000.
    BizLoans.io Business Loan Marketplace
    Get connected with wide range of loan amounts and multiple loan types from reputable lenders.
    $20,000
    $500,000
    Must have good credit and at least 6 months in business.
    Fora Financial Business Loans
    No minimum credit score requirement and early repayment discounts for qualifying borrowers.
    $5,000
    $500,000
    Business age 6+ months. Monthly revenue $12,000+. No open bankruptcies.
    Excel Capital Management Small Business Loans
    Get personalized financing options that suit your unique business needs in just a few simple steps.
    Varies by loan type
    Varies by loan type
    Your business must operate in the US, be at least 1 year old and have monthly revenue of $15,000+.
    Balboa Capital Small Business Loan
    Short-term business financing with no minimum credit score or physical paperwork required.
    $2,500
    $250,000
    Must make $300,000 in annual revenue and be established for at least one year prior.
    LendingTree Business Loans
    Multiple business financing options in one place including: small business loans, lines of credit, SBA loans, equipment financing and more.
    Varies by lender and type of financing
    Varies by lender and type of financing
    Varies by lender, but you many require good personal credit, a minimum business age and minimum annual revenue.

    Compare up to 4 providers

    How do I pick the best financing option for my business?

    Your expenses, credit and other factors shape the types of offers you’d find most suitable. Get a good idea of what to look for by reviewing two main features: offer details and costs.

    Offer details

    • Eligibility. You can cut down on the number of loans you’re comparing by making sure you meet basic qualification standards. Lenders come in all shapes and sizes, and it’s entirely possible that your revenue, credit history or years in business will determine whether you qualify right off the bat.
    • Loan amount. A lender that doesn’t offer the amount you need is likely not your best choice. Be it too much and you pay more than necessary for the loan or too little and you end up looking for secondary options, it’s probably best to find a lender that can more closely meet the exact amount you need.
    • Loan term. Terms become increasingly important when you’re looking to pay back a large loan with a slower cash flow, while a long term could make for unnecessary interest charges or cost more if prepayment fees are tacked on.

    Costs

    • Interest rate. One of the biggest numbers to watch is the interest rate, especially in relation to your loan term. Also check for the APR, where available, to see the total cost of your loan, including any fees.
    • Fees and charges. Ask about fee structures before you apply. Lenders may impose extra charges that aren’t immediately obvious, such as documentation, prepayment, underwriting and origination fees.

    How to successfully apply for financing

    Though you’ll find different requirements based on the lender you work with, common areas that you’ll want to cover include:

    Required documentation

    • Personal ID and business license. You’ll often need to provide a government-issued ID that proves you are who you say you are and that you own the business being financed.
    • Proof of assets. Well document your assets, including any specialized equipment. You might be able to land a lower rate by offering up your assets as collateral for a loan. Take into account any real estate, current balances and specialized equipment you own when seeking a loan. All of these can affect the amount and rates you ultimately qualify for.
    • Proof of income and revenue. Your ability to payback a loan is, in large part, demonstrated by revenue. The previous year’s taxes, bank statements and processed invoices are generally used for this purpose.
    • A detailed budget. Not all lenders require a robust business plan, many will consider a detailed budget sufficient for evaluating your business’s financial health as it grows.

    References can help too. A good relationship with a client may mean a good reference, and a good reference from a client could mean additional proof of an income source.

    6 tips to be successful as a wholesale distributor

    1. Find your niche. Look for a need and fill it. You’re not going to be the only one selling smartphones — tons of businesses are already doing that and doing it well. But you may do better finding a moderate market, rather than an oversaturated one.
    2. Build solid relationships with your retailers and manufacturers. Your business relies on your reputation with retailers. Build trust and understanding with them while elevating the manufacturers you work with.
    3. Be knowledgeable, not a know-it-all. While it’s important to know your inventory, it’s also important to make sure your retailers don’t feel ignored when discussing it. As with most interactions, it’s generally better to say you don’t know something — that you need to research it and get back to them — than it is to talk around it.
    4. Stay abreast of trends. Markets shift often. Home in on what your customers are leaning toward, and move your inventory accordingly.
    5. Automate where possible. There’s a certain satisfaction to manual processing, but it’s ultimately limiting. Automating processes frees up time for you to focus on other tasks and plans.
    6. Customer service first, second and third. Whether it’s your employees, retailers or manufacturers, put your best foot forward. Part of doing business is treating the people around you well to keep and grow your customer base.

    Bottom line

    Successfully get going on your next big project or just get off the ground with the right financing, planning and motivation. By fully understanding the needs of your business you can improve your chances of finding the right lending solution.

    Make sure to compare your options carefully, and always keep in mind how your market may be changing.

    Frequently asked questions

    Rhys Subitch

    Rhys Subitch is a content creator and editor for finder.com. They specialize in updating information on various pages to keep everything accurate for the readers, and enjoy the time they get to spend researching various topics because of it. Rhys lives with their cat and partner in Seattle. When not working they enjoy working on sewing and other craft projects.

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