Wholesale finance: fund supplier orders before your customers pay

Manage the supplier clock and the customer clock

A wholesaler may have to reserve stock with a manufacturer before collecting from its own customers. Growing sales can make this gap larger: more goods are bought, more cash sits in transit and more invoices wait for payment.

Write down the supplier's deposit, balance date and delivery conditions. Then record the customer's order status, delivery acceptance, invoice date and payment terms. These are two different calendars. A confirmed resale order helps explain the purchase, but it is not cleared cash.

Separate orders backed by named customers from speculative inventory for general distribution. Both can be sensible business purchases, but their risks differ. A forecast based on repeat customers should still allow for changed order quantities, cancellations and slower collection.

Wholesale funding should also be distinguished from finance for a retailer's consumers. Here the borrower is the established wholesale or distribution company purchasing stock for its own trade.

Calculate what the order leaves after the goods arrive

Now put dates against those amounts. If the balance and transport are paid before arrival, cash is committed before the customer can inspect the goods. If the customer then has a payment period, the gap continues after delivery.

Include deductions that apply to the actual contract, such as agreed rebates, credits for shortages or returns. Do not include the same gross margin twice: cash needed to run the warehouse and meet payroll is not all available to service borrowing.

For imported goods, HMRC's guidance covers payment of applicable duties and VAT. Confirm the actual treatment and budget with the relevant advisers; the simple example above does not calculate taxes or assume they are fundable.

Choose the funding route for the transaction stage

These are categories to compare, not a promise that Hello arranges every structure. The British Business Bank describes invoice finance as borrowing linked to unpaid customer invoices. Read the actual provider proposal to see which part of your transaction is being funded and what conditions apply.

If another facility already covers the same stock or receivable, disclose it to the provider. Confirm any restrictions and required consents before arranging additional funding. Do not assume two separate products can finance the same transaction without coordination.

Our purchase order finance cost guide explains the order-specific comparison in more detail.

Check currency and payment milestones separately

A manufacturer can invoice in one currency while the wholesaler sells in another. Confirm the vendor's required currency and account details, the conversion terms and the currency in which your business repays. Ask when the rate is fixed and what happens if a payment is delayed.

Payments in most currencies can be considered, subject to the provider's supported destinations, vendors and transactions. An overseas deposit, a balance before shipment and a freight invoice may each need separate approval.

Ask what evidence is required before each payment. Clarify inspection arrangements, dispatch documents and the purchase contract's allocation of delivery risk. Finance approval does not guarantee a supplier will ship conforming goods or a customer will accept them.

For a deeper payment checklist, use the overseas supplier guide. Keep the final quote, purchase order, payment confirmation and delivery records together so the transaction can be reconciled.

Test concentration and overlapping orders

Run the forecast with your largest customer paying later, a shipment arriving after its expected date and one product line selling more slowly. Look at the combined repayments for all orders. A second profitable order may still stretch cash if it arrives before the first one is collected.

Hello focuses on established UK limited companies and LLPs with at least £1 million in annual revenue. Eligible funding can be up to £1 million with repayment terms up to 12 months, subject to the provider's assessment of the business and purchase. Trading internationally does not remove those criteria.

Hello charges £0 for the introduction. Compare the full lender charge, total repayable, transfer or currency costs, security and any early-settlement terms. Keep those costs separate from the supplier's commercial price.

Prepare a clear transaction summary and supplier quotation before enquiring about wholesale funding. The useful question is how the specific order fits the company's cash position, not simply how much credit might be available.

Questions, answered.