Invoice Finance for Wholesale & Distribution
Wholesale and distribution is one of the main users of invoice finance in the UK. The sector's cash flow challenge is straightforward: you buy stock from suppliers (often paying upfront or on 7-14 day terms), then sell to retailers or businesses on 30-60 day credit. Every order requires cash you won't recover for weeks. Invoice finance turns those outstanding trade invoices into immediate working capital.
What this page covers
This page covers
Invoice finance for UK wholesale and distribution businesses, supplier and customer payment terms
Not covered here
Specific provider reviews (see /providers/), general invoice finance education (see /guides/), distribution (see /industries/distribution/)
The Wholesale Cash Cycle
With invoice finance, you'd receive £51,000 (85% of £60,000) on Day 8 - the day after invoicing. That funds your next order immediately.
Key Considerations for Wholesalers
Seasonal stock buying. If your business is seasonal (Christmas gifts, garden supplies, summer clothing), you need to buy stock months in advance. Invoice finance only kicks in once you've sold and invoiced, it's a receivable-side facility, not a way to fund the stock itself before a sale exists. Pre-season stock purchases and purchase-order finance are a different product, from a different type of provider, not something MarketInvoice compares.
Returns and credit notes. Wholesale has higher return rates than some sectors. Providers will adjust your advance if customers return goods or dispute invoices. Keep your credit note rate below 5% for the best terms.
Supplier discounts. Many suppliers offer early payment discounts (2-5% for paying within 7 days). Invoice finance gives you the cash to take these discounts - which can offset the factoring fee entirely. Paying £900/month in factoring fees to save £2,000/month in supplier discounts is a net win.
Customer concentration. If 50%+ of your sales go to one retailer, providers may limit your facility. Diversifying your customer base gets you better terms and higher advance rates.
Importing stock lengthens the gap before it starts. A wholesaler importing goods carries freight time and customs clearance in front of the domestic cash cycle above, cash is committed the moment stock is ordered or paid for overseas, and the 30-60 day customer credit period doesn't start until the goods have landed, cleared, and actually been invoiced out. The receivable itself works the same way once it exists, invoice finance still only advances against an issued invoice, but an importer's gap between paying out and having something to finance is usually longer than a domestic-only wholesaler's.
Best Providers for Wholesale
| Provider | Min Turnover | Stock Finance Too? | Advance Rate |
|---|---|---|---|
| Close Brothers | £750k | Case by case | Up to 90% |
| Bibby | Not published | Yes | Up to 90% |
| Aldermore | £750k | Limited | Up to 90% |
| Lloyds | £100k | Yes - ABL facility | Up to 90% |
Founder & Managing Director, Muswell Rose, founder and PSC of Best Business Loans Ltd
Adam is the founder and managing director of Muswell Rose and a founder of Best Business Loans Ltd, the company behind Market Invoice. He spent over three years as managing director of Penny, a UK invoice finance business, and his career runs through insurance, mortgages, commercial finance and fintech lending. He writes the Market Invoice library.
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