Wholesale Invoice Factoring

Speed up your cash flow without taking on debt

If you’re a business owner or entrepreneur looking for a flexible financing solution to improve cash flow, streamline operations, and boost growth, wholesale invoice factoring could be a solution. But with so many funding options out there, how do you know if wholesaler factoring is right for your business? This guide offers a comprehensive overview of everything you need to know about invoice factoring for wholesalers to help you decide if it’s right for you, as well as tips for choosing the right factoring company for your specific needs.

Wholesale Payment Terms: The Problem With Waiting 30+ Days to Get Paid

Many wholesale companies offer net terms to their customers, meaning you’re stuck waiting 30, 60, or even 90 days or more for payment from retailers. While net terms can provide flexibility and convenience for buyers, waiting to get paid on outstanding invoices is challenging for suppliers. As entrepreneurs ourselves, we understand how stressful this can be!

 Because retailers often pay months after orders are delivered, your business can end up without adequate cash flow. This makes it difficult to cover everyday business expenses like payroll and marketing. It also makes it tricky to purchase more products to supply both new and repeat customers.

Without financing options for small businesses such as distributor invoice factoring or wholesale invoice factoring, your company may be pressured to enforce stricter payment terms or raise prices on your products in order to ensure access to cash. Even if your business qualifies for bank financing, the application process is slow and cumbersome. This is true even if you already have financing, such as a line of credit you want to raise the limit on.

What is Wholesale Invoice Factoring?

Wholesale invoice factoring is a financing method that allows businesses operating in the wholesale distribution industry to convert their unpaid invoices into immediate cash. It is a form of accounts receivable financing or distributor invoice finance where a company sells its invoices to a factoring company at a discounted rate in exchange for immediate payment.

If you’re a growing business, oftentimes you need working capital quickly to fund big projects. And unless you have excellent credit history with more than a couple of years in business, it will be difficult to qualify for traditional financing options through a bank. Wholesale invoice factoring can be a practical option in this case.

Wholesale lending in the form of wholesale invoice factoring is designed to address the unique capital expenditures and cash flow cycles of wholesalers. In addition to meeting both short-term and long-term funding needs, account receivable financing for wholesalers can bridge any gaps in revenue until your customers’ unpaid invoices are settled.

How Does Wholesale Invoice Factoring Work

The process of wholesale company invoice factoring is slightly different for each wholesale factoring company, but here’s how it works with FundThrough:

1. Invoice Generation: Deliver your goods or services to your customers and generate the invoices.

2. Invoice Submission: Submit unpaid invoices to FundThrough. 

3. Verification and Approval: FundThrough verifies the invoices and assesses your customers’ creditworthiness.

4. Funding: Once approved, FundThrough advances 100% of the invoice value, minus a transparent fee, giving you a quick cash boost.

5. Collection and Payment: FundThrough handles invoice collection. Once your customer pays, your obligation ends.

For more details, visit FundThrough’s How it Works page.

Ready to get your invoices paid early?

Wholesale Factoring Use Cases

Any situation where you find yourself in need of working capital quickly and easily could be a use case for factoring for distribution companies, but these are the ones we see most often based on our experience with our clients:

  • Growth Opportunities: Pursue timely growth opportunities without cash flow constraints.
  • Manage the wait to get paid: Reduce time tracking down slow-paying customers and waiting 30, 60, or 90 days to be paid
  • Payroll: Ensure timely payroll payments without waiting for customer payments.
  • Bulk Purchases: Buy inventory in bulk to take advantage of discounts and meet demand.
  • Seasonality: Manage cash flow during seasonal fluctuations or cyclical downtimes.
  • Cash Flow Crunches: Address cash flow gaps quickly and efficiently.
  • Loan Alternatives: Access working capital even if you can’t qualify for a traditional loan.

Why Wholesalers Choose FundThrough for Invoice Factoring

Factoring for distributors offers several benefits.

  • 100% Advance Rates: FundThrough offers 100% advance rates on invoice values, providing you with maximum cash flow.
  • Accounting Integrations: With integrations like QuickBooks and OpenInvoice, FundThrough pulls in eligible invoices, making the process seamless.
  • Fast Funding: Receive funds in your bank account in a matter of days, ensuring you can meet your financial needs quickly.
  • Transparent Fees: FundThrough ensures transparent and straightforward fee structures, so you always know what to expect.Quick access to funding. Wholesale invoice factoring provides an alternative to waiting for customers to pay their invoices, allowing businesses to access immediate cash for operational needs.
  • Flexibility in improving cash flow. Distribution factoring allows you to factor specific invoices only when you need a boost of funding. This can offer greater flexibility when it comes to improving your cash flow than traditional financing options like bank loans or lines of credit.
  • Easy process. The best wholesale invoice factoring companies use technology and other innovations to make the funding process quick and easy.
  • Better terms with suppliers. When you have sufficient, reliable working capital, you’re in a stronger position to negotiate better terms with suppliers as you can meet your financial obligations without delay.
  • No debt. Factoring is not a loan; it turns invoice into cash without adding any debt to your balance sheet. It also lessens the risk of non-payment or payment delays.
  • Less administrative burden. When you factor an invoice, the invoice factoring company takes care of the collection process on your behalf. This means you have more time to focus on your core business efforts rather than chasing down outstanding invoices.
  • No bank hassles. Traditional bank financing often requires time consuming applications and lengthy approval processes. That’s if you even have the credit history required in order to qualify. Not so with distribution factoring.

Ready to get your invoices paid early?

When it comes to choosing a wholesale factoring partner, it’s important to do your homework. We’ve made it easy for you to know the right questions to ask as you vet a partner to find out if they’re a fit.

By considering the answers to the questions below, you’ll be in a good position to make an informed decision and choose a partner that best suits your business requirements, so you can optimize cash flow and drive growth.

Does the factoring company work with wholesale providers?

Most factoring companies work with most industries, but not all. Some factors specialize in only a few industries. When you work with a factoring company that has experience in the wholesale industry, they already understand the nuances of the industry which makes it easier to work together.

FundThrough works with wholesale providers.

What advance rates does the factoring company offer?

The advance rate is the percentage of the invoice value the factor will advance your business. Advance rates can range from 60% to 100%, depending on the factoring company and sometimes the industry. Always inquire about the advance rates a distribution factoring company offers, as higher advance rates provide more immediate working capital for your business.

FundThrough advances 100% of the invoice amount, less a fee.

What factoring fees does the factoring company charge?

Any factoring company should be able to tell you what you’ll pay up front. This should include the discount rate – the percentage of the invoice the factor keeps for their fee, often between 1% and 5% – and any hidden fees. Sometimes a low discount rate can mean you’ll get charged hidden fees later.
See FundThrough pricing – we offer 100% advance rates minus our discount rate. No hidden fees.

Does the factoring company do spot factoring?

A minimum is the amount you must factor every period (month, quarter, or year) or a requirement that you must factor every invoice for a particular customer. Some factoring companies offer plans that require minimums, while others do not.

FundThrough doesn’t require minimums. Only fund the invoices you want, when you want.

Ready to get your invoices paid early?

FAQs: Accounts Receivable Financing for Wholesalers

What is wholesale invoice finance? How is it different from factoring?

Wholesale invoice finance is often used as another term for wholesale invoice factoring, but it’s actually slightly different. With wholesale invoice financing, a financing company advances payment for your invoice ahead of net terms. You then repay the finance company for the loan, plus any fees over a set period of time. There is no customer contact, and you work with them to settle payment according to the original invoice terms.

With wholesale invoice factoring, a factoring company advances payment for your invoice ahead of net terms, minus any fees. The factoring company works with your customer to redirect payment, and manages the collections process on your behalf. Once the invoice is paid according to the original invoice terms, there’s no further obligation.

What are typical rates for distributor factoring?

Typical rates for distributor factoring vary, but they generally range from 1% to 5% of the invoice value per month. Rates depend on factors such as the creditworthiness of your customers, the volume of invoices, and the terms of the factoring agreement.

FundThrough offers a simple and transparent fee structure. See our pricing page for details. The rates vary depending on the length of the net terms. For more information on rates, check out our detailed guide on invoice factoring rates.

What are typical application requirements?

To qualify for invoice factoring with FundThrough, businesses typically need to meet the following requirements:

  • Outstanding invoices of at least $100K in accounts receivable or invoices to one customer
  • B2B transactions (invoicing other businesses or government agencies)
  • Invoices for completed work with an expected due date
  • No liens on receivables that cannot be removed​
  • No construction or real estate

For more information, visit How It Works.

What's the difference between recourse and non-recourse distributor factoring?

Recourse factoring means that the business retains the risk of non-payment. If the customer fails to pay the invoice, the business must repay the advanced funds to the factoring company. This option usually has lower service fees due to the reduced risk for the factoring company.

Non-recourse factoring transfers the credit risk to the factoring company. If the customer defaults, the business is not responsible for repaying the advance. This option comes with higher fees due to the increased risk assumed by the factoring company​. You can read more here for a more detailed breakdown of invoice funding basics.

How Does Wholesaler Factoring Compare With Other Kinds of Business Financing?

In the past, factoring was largely misunderstood. Business bank loans and lines of credit were the traditional and accepted forms of financing, along with credit cards. Each of these different funding options have pros and cons to consider.


Costs for a new or growing business can be significant. You may need to purchase equipment and inventory, pay employees, and keep up with rent, taxes, and marketing. You may consider taking out a business loan.



  • Many business loans have relatively low interest rates when compared to many other types of funding.
  • Interest can be deductible on your taxes.
  • Depending on your requirements, you may have access to large sums of money to be used to grow your business.
  • On-time repayments can help improve your credit rating.




  • Many small, growing businesses don’t qualify for loans. They often need cash faster than the process would allow anyway.
  • Most lenders have strict guidelines for loans and a lengthy review process.
  • You may need to have a good credit rating. Anything else and you may not qualify and if you do you’ll likely pay a higher interest rate.
  • Rates can fluctuate depending on the market. 
  • A business loan and the debt will show up on your balance sheet, which affect the valuation of your business.


Lines of Credit

A line of credit (LOC) is a lot like a credit card. You can withdraw money up to a certain maximum amount determined by your financial institution. You can cover day-to-day expenses and pay back your debt, only to borrow again when needed.



  • When you’re short of cash, you can borrow only what you need as long as you don’t exceed your limit.
  • Making on-time payments can help improve your credit score.
  • Lines of credit can have low interest rates.




  • As with loans, oftentimes banks won’t give small, growing businesses a line of credit. They often need cash faster than the process would allow anyway.
  • There will be limits on the maximum amount you can borrow, which might not always be enough.
  • Although you pay-as-you-go, if you miss payments, are late, or move outside the terms of your agreement, you might face high fees.
  • It’s easy to misuse a line of credit (just like it’s easy to misuse a credit card).
  • If your business fails, you are responsible for any payments and debt incurred from using your line of credit.
  • You need to have been in business at least two years, and will need to provide bank account information, financial statements, tax returns, and more to qualify.


Business Credit Cards

Like many forms of funding, the flexibility of credit cards is easy to use, making them easy to use too much.



  • It’s easier to qualify for a business credit card than for a line of credit or business loan.
  • You have quick access to the cash you need when you need it.
  • Many business credit cards have reward programs or incentives, like cash back or airline miles.
  • A business credit card can help build credit, which is helpful if you ever need to apply for a bank loan.




  • You may need to provide a personal guarantee to qualify.
  • High interest, annual fees and late charges can add up, especially if funding a large expense.
  • Many business credit cards do not offer purchase protection.
  • Business credit cards come with security risks like fraudulent charges from unauthorized use and stolen credit card numbers.
  • You risk overspending.


Receivables Factoring (a.k.a., Distributor Factoring)

Invoice factoring is not a loan. The application process is quick, there is no debt to record on your wholesale company’s balance sheet. Plus, many more companies will qualify.



  • You can get access to capital quickly, often in days.
  • Get funding any time on short notice, with no funding limits and no hidden fees (specific to FundThrough)
  • Does not require your business to have a long credit history , which is best for start-ups and fast-growing firms.
  • Factoring relies on the creditworthiness of your customers, not yours.
  • Invoice factoring is easier to get approved for than most other forms of funding.
  • If your wholesale business is seasonal, factoring can infuse cash into your business to get you through the downtimes.
  • No debt because your accounts receivables are used as collateral.
  • You give up no equity or control in your business.


  • No long-term commitment after the invoice is paid



  • Invoices need to be verified (customer contact required). In the past, the negative perception of factoring stemmed from aggressive collection practices employed by certain factoring companies. However, at FundThrough, we take a different approach . We work closely with you before contacting your customers, ensuring a respectful and professional experience, and treating them as if they were our own.

Our Approach to Working with Different Industries

FundThrough pays invoices in days for industries outside of this list as well.

Simple. Intuitive. Wholesale Invoice Factoring.

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