Back to Blog Feed

We will help you grow your small business.

Learn More

Join our Newsletter for great tips and updates.

For some types of companies, the business cycle can be painfully drawn out. Wholesale and manufacturing businesses are prime examples. You have to spend money on supplies and labor to produce or acquire your goods. Usually a lot of money. But once those products are sold, you may wait weeks or even months to get paid. Small business loans can help bridge that gap.

Uneven cash flow is a problem for most small businesses. But the longer the wait between sales and income, the tougher it is to manage your cash.


Wholesale businesses can find themselves with a cash flow deficit when customers don’t pay in a timely manner. Sales may be great, and your books may show a handsome total in receivables. But you can’t spend money you don’t have yet. Wholesalers can also develop a cash crunch by over-investing in inventory. If inventory doesn’t turn quickly, it’s just potential working capital sitting in your warehouse. Out of reach.

According to Exact, “Outstanding payments mean missed opportunities to invest in new stock, new equipment, or more staff, so you need to be able to keep track of who owes what and by when, and to send out payment reminders easily. This will help you to keep your DSO (Days Sales Outstanding), your cash flow and even your blood pressure under control.”


Sometimes your business is flush. That big influx of cash is great. But when your weekly (or monthly) revenue is too small, your wholesale business suffers:

  • You cannot pay regular operations expenses in timely manner
  • You pay more for supplies because you’re unable to take advantage of up-front or higher volume discounts
  • You cannot forecast accurately or plan effectively
  • Every surprise expense becomes an emergency because there aren’t resources on hand to deal with it
  • New opportunities go unanswered because you don’t have the capital
  • Your business develops bad credit

No wonder Corporate Finance Associates says you have to know your breakeven cash flow. “Cash flow is one of the most commonly used terms in business – and is also one of the most often misunderstood concepts,” they note. “Many managers and business owners believe that generating more sales is the way to fix cash flow problems. However, increased sales may not increase cash flow. Other costs associated with sales, such as selling expenses or variable costs may even require more cash. Understanding the cash cycle of your company may assist you in making sound business decisions.”


An article in  the New York Times notes that “maintaining smooth cash flow requires juggling nearly every facet of a business, from staying on top of accounts receivable, to extending lines of credit, to managing inventory. The essence of successful cash flow management is regulating the money flowing in and out of your business. Increasing your cash flow reduces the amount of fixed capital that you need to support the given level of your business. An increased, consistent cash flow also creates a predictable business pattern, making it easier to plan and budget for future growth.”

Make payments instead of paying up front. Your customers do it, and you can, too. Try to negotiate 30- or 60-day terms with your suppliers.

Don’t buy from a sole vendor. You may have a favorite supplier, and they may offer great prices. But you’re totally dependent on them. Anything that goes wrong at their end, from a glitch to a full-on disaster, will leave you and your customers in the lurch. You can’t afford that.

Shoot for just-in-time inventory management. Wholesale companies of all types now use this approach. You can realize dramatic efficiencies. You can save space, conserve working capital, and respond quickly when necessary.

Consider leasing instead of buying when it comes to large equipment or vehicle purchases.

Knowledge is power. Adopting modern technology makes it easier to manage your inventory and cash flow.

Make sure your business maintains a good credit rating. The more reliable you appear to be, the more likely you are to get better deals from suppliers. And from lenders, whether you’re looking for a traditional bank loan or financing from an alternative lender. That said, if your business credit isn’t what it should be, alternative lenders can be your best friend. Here at United Capital Source, you can qualify for various types of small business loans that don’t depend on your credit score.


Small business loans should be an integral part of every wholesale business owner’s financial toolkit. After all, the last thing you want is to let cash flow problems kill your growth plans. And there’s no need for that to happen.

Borrowing money to fill in the gaps can be a quick and simple fix. But it’s not a long-term financial plan. For one thing, you must repay whatever you borrow. That puts additional strain on your cash flow. What you really need to do is take a proactive, big-picture approach, rather than constantly reacting to the latest crisis. Small business loans can do a lot more for your wholesale business than bridge gaps. You can use them as a strategic growth tool.

I think you’ll relate to this story. One of our UCS clients is in the constructions materials business. Construction is famous for long accounts receivables cycles. So Greg needed a bridge loan to cover payroll, etc. But he also needed working capital to replenish inventory and keep his business growing. His UCS account rep matched him with exactly the funding he needed, quickly and without hassle.

We can connect you with the right small business loans for your wholesale business, too. In fact, we’ve already helped business owners like you obtain more than $600 million in funding. We know that when you have the cash you need to run your business, the sky’s the limit.

We will help you grow
your small business.

Get Started

Leave a Reply