For wholesalers, the key to success is continually seeking new ways to enhance efficiency and productivity. Possible options include purchasing better equipment, implementing advanced technology, or recruiting more salespeople.
However, obtaining these resources becomes very difficult when your customers take several weeks (or even months) to settle their payments. Wholesalers also frequently purchase excessive inventory, which leaves valuable working capital idle on their shelves.
Then there are a host of circumstances beyond their control, such as seasonality or shifts in demand. United Capital Source offers access to Wholesaler Business Loans, enabling wholesalers to capitalize on opportunities, save money, and fulfill increasingly larger orders.
Wholesaler Business Loans are business loans specifically designed to support the cash flow cycles and capital expenditures of wholesalers. In addition to covering short-term needs and larger purchases, Wholesaler Business Loans can bridge revenue gaps until customers send payments or demand picks back up.
Business loans for wholesalers can come in the form of:
Each of the products listed above can suit a different type of expense or cash flow issue. For example, let’s say a hot new item has emerged, and you know your customers will be interested. If most of your working capital is compromised, you could secure the order with a business line of credit.
This is the ideal option for moderately-sized, short-term expenses. Your interest rate is lower when you pay off the balance as quickly as possible. And as long as you continuously pay back what you owe, that money becomes available again. In other words, you won’t have to apply for funding every time you need to order extra inventory. This makes a business line of credit similarly suitable for bridging revenue gaps, as you can expect your customers to settle their accounts shortly.
Another suitable solution for long payment cycles is accounts receivable factoring. You would sell the unpaid receivables for a discount price (at least 85%). Instead of waiting weeks or months for compensation, you’d get cash in just a few business days. It is now the responsibility of the factoring company to collect the payment from your customer. When the payment is collected, you get paid the remainder from the first sale, minus fees. With advance rates up to 90%, your receivables and inventory will be working overtime to increase liquidity and buying power.
Asset-based lending is one of the most common wholesale financing solutions we offer, utilizing your business’s assets as collateral for quick access to working capital. Equipment financing is also a form of asset-based loan.
Wholesale financing, also known as Floor Planning, is another everyday use of small business loans. The main requirement to qualify for wholesale financing is sufficient collateral to cover the debt. Working capital loans can help support operations.
For larger purchases, such as new delivery trucks or real estate, consider business term loans, SBA loans, or Equipment Financing. We can customize your terms to suit the timeframe of your investment, as well as the time it will take for your new asset to generate revenue.
| LOAN TYPES | MAX AMOUNTS | RATES | SPEED |
|---|---|---|---|
| Merchant Cash Advances | $7.5k – $1m | Starting at 1-6% p/mo | 1-2 business days |
| SBA Loan | $50k-$10m | Starting at Prime + 2.75% | 8-12 weeks |
| Business Term Loan | $10k to $5m | Starting at 1-4% p/mo | 1-3 business days |
| Business Line of Credit | $1k to $250k | Starting at 1% p/mo | 1-3 business days |
| Receivables/Invoice Financing | $10k-$10m | Starting at 1% p/mo | 1-2 weeks |
| Equipment Financing | Up to $5m per piece | Starting at 3.5% (SBA) | 3-10+ business days |
| Revenue Based Business Loans | $10K – $5m | Starting at 1-6% p/mo | 1-2 business days |
Wholesale financing allows you to take on increasingly larger orders, despite your elongated payment cycle and seasonal shifts in demand. Not only can you obtain critical resources like warehouse equipment, but you can also attract larger customers by hiring more salespeople and agreeing to longer payment terms. The sizes or frequencies of orders don’t have to stop you from capitalizing on opportunities to expand your offerings or sign larger customers.
Many wholesalers have said that technology has played a significant role in forecasting demand and ordering the right quantities of items. Wholesale business loans can provide the means to purchase expensive software tools while staying current on your other bills.
Another significant advantage of wholesale business loans is the potential to increase profitability. The longer it takes you to sell your items, the less profitable they become. But with Wholesaler Business Loans, you can place orders when it makes sense for demand instead of only when you can afford it. And when you can sell items faster, you won’t have unsold inventory eating up working capital.
Lastly, it’s important to note that you don’t need perfect cash flow to be approved. Occasional dips in revenue won’t prevent you from accessing the most logical solution to your current dilemma. After all, you can’t always predict when you’ll find yourself in a cash flow squeeze or when massive expenses will arise.
Wholesalers might avoid business loans altogether because they struggle to determine how to utilize the funds. There are numerous options: hiring more salespeople, implementing new technology, purchasing additional delivery trucks, leasing more space for larger orders, and so on. Choosing the wrong investment could come back to haunt you.
Major expenses also tend to create other costs. For example, let’s say you take out a loan to hire a new sales team. However, you then recall that salespeople are paid by commission. The same problem could arise when you order additional inventory to expand your offerings. Do you have the workforce or equipment to handle and deliver this new inventory on top of your current inventory?
This makes it very difficult to figure out how much to borrow. If you borrow too little, you won’t be able to cover those additional expenses. But if you borrow too much, you’ll have debt that you can’t afford to pay back.
Couple these uncertainties with new demands from manufacturers and retailers, and you’ve got at least a few scenarios where additional debt could do more harm than good.
Pros:
Cons:
The amount of paperwork required depends on the product you choose. Funds can be approved and distributed for most products within 1-3 business days. Here’s how to apply:
The first step is choosing the most sensible solution to the problem at hand. This should require some research, as each product is designed for different types of expenses and cash flow cycles. Are you looking to cover a short-term or long-term expense? Is demand expected to increase or decrease in the coming months?
Considering the funds’ purpose will also help us determine the correct borrowing and terms for your needs.
Here are the documents and information required for all Wholesaler Business Loans:
Driver’s license
Voided business check
Bank statements from the past three months
Invoice for equipment (for Equipment Financing)
Credit card processing statements from the past three months (for Merchant Cash Advance)
SBA loans require additional documents and information, such as financial statements. To learn what’s needed for the SBA-backed loans, visit our SBA loan page.
You can begin the application process by calling us or filling out our one-page online application. Either way, you’ll be asked to enter the information from the previous section along with your desired funding amount.
Once you apply, a representative will contact you to explain the repayment structure, rates, and terms of your available options. This way, you won’t have to worry about any surprises or hidden fees during repayment.
If you’re approved, we’ll contact you within 24 hours. After closing, funds for most business financing products should appear in your bank account within 24 hours to one week.
Your business loan isn’t just a way to get financing for your business. It’s also an excellent opportunity to start building (or improving) your credit.
Regardless of the type of business loan you get, make all your required payments on time and in full. If you get a business credit line or another form of revolving credit, keep your balance below the credit limit.
Consistently making your business financing payments on time and in full will positively impact your credit. And that means preferred rates and terms when you next need business financing.
If your application is declined, it’s possible that you applied for the wrong product to meet your cash flow needs. We would likely recommend a different product with a less hazardous repayment structure in this case.
Your application might also be declined if it is determined that you cannot afford to take on more debt at this time.
If your credit score is holding you back from accessing financing, consider working with a reputable credit repair service to raise your scores.
If you have your documents in order, you can complete the entire application in just a matter of minutes. Upon approval, funds for most products can be distributed in 1-3 business days. The best wholesale financing companies will provide you with flexible solutions based on what your business needs.
Equipment financing and accounts receivable factoring may take 1-2 weeks to complete. SBA loans have the most extended period, often taking 3-5 weeks to be approved and a total of 45-60 days to close and be disbursed. This is because SBA loans typically feature larger amounts (i.e., more than $350,000) and longer terms. The 7(a) loan program is the SBA’s primary business loan program, providing financial assistance to small businesses.
For this reason, substantial paperwork is involved, including:
Personal Tax Returns
Business Tax Returns
Personal Financial Statement
Statement of Personal Credit History
Credit Card Processing Statements
Debt Schedule
Rental/Lease Documentation
Wholesaler Business Loans can be used for a myriad of financing needs, including (but not limited to):
Yes, six of the eight products mentioned above are accessible for borrowers with bad credit. Your rates may be higher, and your terms may be shorter because bad credit makes you more likely to default. However, if you have a strong cash flow or can provide collateral, your bad credit may have a less significant impact on your rates and terms. We can also customize your terms and payment frequency to ensure that you can make payments while staying current on other bills.
For some products, your credit score is irrelevant. Approval for a merchant cash advance is based on your debit and credit card sales volume. With accounts receivable factoring, approval depends on your customer’s creditworthiness, not your own.
The only product that is not accessible with bad credit is SBA loans. Compared to other products, SBA loans offer higher borrowing limits, lower interest rates, and longer repayment terms. If you have bad credit, you’ll be assigned shorter terms to ensure you repay the loan in full.
Fraud Disclosure:
Please be aware that individuals have been fraudulently misrepresenting to business owners (and others) that United Capital Source, Inc. (“UCS”) can assist small businesses in receiving government grants and other forgivable business loans, when in fact those grants or loans do not exist or are not available. These individuals have ulterior motives and are engaging in the unauthorized use of the names, trademarks, domain names, and logos of UCS in an attempt to commit fraud upon unsuspecting small business owners.
UCS will never communicate with a prospective client on Facebook, Facebook Messenger, or any other type of social media. Further, any email communications will always come from an official UCS email address and not a Gmail, Yahoo, or other email domain. If you believe you have been contacted by someone posing as an employee of UCS, please email [email protected].
