Invoice Finance for Wholesale & Distribution
UK wholesale and distribution businesses drew £2.9 billion from invoice finance facilities in 2025. The sector's cash flow challenge is straightforward: you buy stock from suppliers (often paying upfront or on 7-14 day terms), then sell to retailers or businesses on 30-60 day credit. Every order requires cash you won't recover for weeks. Invoice finance turns those outstanding trade invoices into immediate working capital.
The Wholesale Cash Cycle
With invoice finance, you'd receive £51,000 (85% of £60,000) on Day 8 — the day after invoicing. That funds your next order immediately.
Key Considerations for Wholesalers
Seasonal stock buying. If your business is seasonal (Christmas gifts, garden supplies, summer clothing), you need to buy stock months in advance. Invoice finance only kicks in once you've sold and invoiced. For pre-season stock purchases, ask about stock finance or purchase order finance alongside your invoice facility.
Returns and credit notes. Wholesale has higher return rates than some sectors. Providers will adjust your advance if customers return goods or dispute invoices. Keep your credit note rate below 5% for the best terms.
Supplier discounts. Many suppliers offer early payment discounts (2-5% for paying within 7 days). Invoice finance gives you the cash to take these discounts — which can offset the factoring fee entirely. Paying £900/month in factoring fees to save £2,000/month in supplier discounts is a net win.
Customer concentration. If 50%+ of your sales go to one retailer, providers may limit your facility. Diversifying your customer base gets you better terms and higher advance rates.
Best Providers for Wholesale
| Provider | Min Turnover | Stock Finance Too? | Advance Rate |
|---|---|---|---|
| Close Brothers | £50k | Case by case | Up to 90% |
| Bibby | £50k | Yes | Up to 90% |
| Aldermore | £250k | Limited | Up to 90% |
| Lloyds | £500k | Yes — ABL facility | Up to 90% |
Oliver Mackman
Director, Market Invoice
Oliver leads Market Invoice's editorial and comparison research. With a background in UK commercial finance, he oversees provider analysis, rate verification, and industry reporting across all verticals.
Last reviewed: 4 April 2026