Lines of Credit for Wholesale and Industrial Distributors
Distributors pay suppliers before customers pay them, and the gap grows with every new account. A revolving line backed by receivables and inventory expands as sales grow. We prepare the package and place it with banks and private credit funds that lend to distributors.
A distributor line of credit is a revolving facility backed by eligible receivables and inventory. Lenders commonly advance 80–85% of current receivables and 40–60% of eligible inventory, so availability rises as sales and stock grow. The distributor draws to pay suppliers and repays as customers pay.
Discuss your distribution line of credit
Tell us what you need, your timeline, and the context behind your transaction.
- A review of your business and capital needs
- Placement options aligned with your transaction
- A clear conversation about the next steps
Wholesale distribution lines: what lenders generally look for
General market observations used by banks and private credit funds at this size.
| Benchmark | Typical range |
|---|---|
| Distributor profile | Commonly 3+ years operating and $5M+ in annual revenue |
| Receivables advance | Commonly 80–85% of eligible AR under 90 days |
| Inventory advance | Commonly 40–60% of eligible inventory, often capped |
| Key reviews | Customer concentration, inventory turns and gross margin |
| Pricing basis | Spread over SOFR or Prime, plus fees |
| Reporting | Monthly borrowing base, receivables and inventory reports |
Educational ranges only. Independent capital providers set eligibility, pricing and terms.
Who a distribution line fits
- Industrial, building-products, food and medical-supply distributors
- Companies building inventory ahead of a seasonal peak
- Distributors adding product lines or large customer accounts
- Businesses whose current bank line no longer covers sales volume
Outside what we place
- Businesses without commercial receivables
- Slow-moving or obsolete inventory as the main collateral
- Paying off merchant cash advances or consolidating existing debt
Illustrative example: a $3M line for a building-products distributor
A $28M-revenue building-products distributor holds $3M of receivables and $2.5M of inventory ahead of spring. After excluding older receivables and slow stock, eligible collateral is $2.6M of receivables and $1.8M of inventory.
At an 85% receivables advance and a 45% inventory advance, availability is about $2.2M plus $810K, or roughly $3M. Illustrative only — the capital provider sets advance rates and eligibility.
Documents to prepare
- Two to three years of financial statements or tax returns
- Current accounts receivable and payable aging
- Inventory report by category, age and location
- Top customer and supplier lists
- Schedule of existing debt and liens
Frequently Asked Questions
Common questions about wholesale distribution lines.
Availability is usually based on a borrowing base: commonly 80–85% of eligible receivables plus 40–60% of eligible inventory, minus reserves. These are general market ranges; the capital provider sets the final advance rates.
Get a confidential placement review
Tell us what you need, your timeline, and the context behind your transaction.
- A review of your business and capital needs
- Placement options aligned with your transaction
- A clear conversation about the next steps
Tzortzis Capital evaluates and arranges capital placements. Independent capital providers determine eligibility, pricing, documentation and closing timing. Published ranges are indicative, not approvals or commitments.