How money moves in this industry
A large order may require a supplier deposit, freight and duty before a customer invoice is issued, creating a gap even when the sale is profitable.
A practical example
A distributor accepts a large retailer order, pays an overseas supplier up front and receives customer payment after delivery.
This illustrates a funding need; it is not a lender eligibility claim or a recommendation to borrow.
Common reasons to explore finance
- Supplier payments
- Imports
- Inventory
- Debtor timing
Equipment and assets that may be financed
Asset finance depends on the lender's product, the asset, its condition and the proposed term. Examples in this industry include:
- Warehouse equipment
- Forklifts
- Delivery fleet
Questions to prepare for a lender discussion
These are useful preparation questions, not a statement that any particular lender accepts this industry.
- Are purchase orders confirmed?
- What are supplier and customer credit terms?
- How much stock is committed to a buyer?
Insurance and business continuity
Finance is one part of a business decision. This industry may also need to consider goods in transit, property, business interruption cover, depending on its activities, contracts and legal obligations. Our business insurance guide explains the concepts and links to official Australian sources.