Loans For Wholesalers

Written by Richard Wilcock | Reviewed by Jamie Moorcroft | Updated: October 31, 2024

Table of contents

• What is a loan for wholesalers?
• Do I need a loan for wholesalers?
• Types of business loans for wholesale traders
• How to apply for a loan for wholesale businesses

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What is a loan for wholesalers?

A business loan for wholesalers is designed to help manage cash flow, grow their retail business (perhaps from an amazon only seller or ebay only business), expand to new premises, and market to new customers. You can spend your business loan on anything you can think of to grow your wholesale business. Loan types include invoice finance, merchant cash advances, and business loans.

Do I need a loan for wholesalers?

Whether you need a loan really depends on your financial situation. If you want to keep your working capital reserves virtually untouched, consider applying for business finance to help you reach your business goals quickly.

Many wholesalers face challenges with inventory management; sourcing products to store and sell in bulk to smaller companies can be a long journey. This can leave products in storage until they’re purchased, which means significant financial outlay. Cash flow management is key to a profitable and sustainable business. Loans for wholesalers can help ease the stress and plug financial gaps, helping you keep daily operations running smoothly.

Types of business loans for wholesale traders

Many business finance products are available; here are just three options to consider.

Invoice finance

If you invoice your customers, you usually wait for payment within a pre-agreed time frame, i.e. 60 or 90 days. These long periods mean you’re left waiting for funds for items that were bought in bulk many months previous.

Invoice finance shortens that waiting period instantly. You can access up to 95% of your unpaid invoices. The invoice financing company can even chase the payment on your behalf.

Merchant cash advance

If you accept credit and debit card payments at your wholesale business and process a minimum of £2,500 a month in card sales, you might be eligible for a merchant cash advance.

A cash advance is an advance on your future sales. Unlike traditional loans, you repay an advance as a percentage of monthly card sales. This means repayments aren't fixed and can help with any seasonality to your wholesale business.

Unsecured and secured business loans

Which business loan is best for you can depend on how much you want to borrow, over what period, your credit score and whether you have a high-value asset.

Secured loans are best for newer companies with virtually no credit or bad credit history. Or for businesses who want to repay over a longer period or access loan amounts in excess of two million.

Note: you must have a high-value asset like commercial property, land or vehicles.

Unsecured loans are best for wholesaler business owners looking to access funds within a few days, sometimes hours. As they're not secured, you pay higher interest rates and must repay within a shorter timeframe (usually within five years).

Note: lenders will expect you to have a decent credit score to apply for unsecured loans.

How to apply for a loan for wholesale businesses

At Capalona, we’ve created a free, self-serve loan comparison platform. Enter your loan requirements, including term and amount, and compare eligible loan offers in seconds.

If you find a loan you like, expand the lender details to read more and proceed with your application. Compare wholesale loans.

About the author

Written by Richard Wilcock

Money Writer, Director and Co-Founder

Richard is one of the Co-Founders here at Capalona and has over twenty years of experience in the marketing industry, specialising in the finance sector.

Updated: October 31, 2024
Published: January 01, 2017