What funding is usually needed for a wholesale business?
Wholesale companies sell and distribute products to resellers. Wholesale entrepreneurs are divided into several categories, the main ones are:
Wholesalers: wholesalers get products from manufacturers, and store them before reselling them to consumers
Agents and producers: agents and producers do not deal directly with products, but they negotiate transactions between sellers and buyers
Branch and office producers: the function of office facilities is to distribute products from producers to the wholesaler level
Loans for wholesalers can meet various expenses for running wholesale companies such as the following:
Buy inventory stock
Getting a loan can help businesses meet their investment needs, for example having enough inventory to meet consumer demand, expanding offers to attract consumers or buying large quantities of wholesale products that are being discounted to save production costs.
Automation, global expansion, omnichannel sales and B2B e-commerce are a fast-moving trend in the development of wholesale distribution – of course companies need to invest in technology to meet this emerging trend in the market. Examples of modifying websites, cross-border transaction technology, automation tools, tools for consumer management and even B2B e-commerce.
To effectively promote your products to retailers and buyers, you need the right marketing strategy. Generally, wholesale companies use online and offline marketing methods, such as e-mail promotions, content marketing, member get member programs, contacting prospective customers, creating advertisements and sending letters or packages containing product samples.
Expanding Warehouse Capacity
Narrow and irregular storage places affect the efficiency and safety of workers. External financing can be useful to cover the costs needed to move the warehouse to a more comfortable and spacious place, or renovate a warehouse by adding floors or expanding warehouse capacity.
Managing Employee Salaries
To ensure the company’s activities continue to run smoothly, you must ensure warehouse employees, together with the team in the office, can work together to manage all aspects of the company such as relationships with consumers, finance, and marketing. During difficult times of the company, the choice of external financing is very useful to help you pay employee salaries on time.
What types of loans are available for wholesale business?
Loan with guarantee
This type of loan requires the borrower to hand over assets as collateral to the loan provider. If the borrower cannot repay the loan in accordance with the agreement, the loan provider can sell the asset a number of outstanding debts. Working capital loans, factoring (invoice financing), and inventory financing are examples of this type of loan.
Unlike a secured loan, this type of loan does not require collateral, and is approved based on other factors such as the creditworthiness and financial strength of your company. Through alternative loan providers, applying for a loan without guarantee can be fast and convenient. An efficient process, plus the flexibility of offering loans to be able to meet a variety of business needs.
Factoring Receivables (Invoice Financing)
Factoring is a short-term financing option that allows employers to borrow funds based on bills that have not been paid to him. This financing is the right choice for small to medium scale wholesalers, because usually this scale business often finds a gap between the time of payment to the provider and the time the entrepreneur gets paid from the customers.
This type of loan is a loan with your inventory of goods / products as collateral. These loans are usually used for short-term business purposes, such as covering the lack of funds or buying other stocks to prepare if consumer demand increases.
Tips to help you prepare loan applications
Getting external funding can be difficult for small and medium scale businesses, but with proper preparation, the process can be easier. The following are tips so that you are confident loan approval is approved:
Develop Clear Planning
Mapping a comprehensive plan – including predicting sales, outgoing and incoming funds – can help prospective lenders understand the details of why they should invest in your company, this gives an idea of your company’s progress in the next six months or one year. It is also important to elaborate on your strategy to repay the loan, this method is good for showing that you are able to make credit payments consistently.
Show you have high selling points
With inventory financing, loan providers need to determine that your product has high selling value. Remember, you must be able to show that you can sell the stock that you have in a short time, also prepare a consistent company sales track record. In submission, this is used as an indication that you can set the product to sell quickly.
Where can I get a loan for a wholesale business?
Sometimes funding from parties is needed to expand the business and finance the company’s daily activities. But to get it is not an easy thing, especially submission to conventional lenders requires a lot of requirements and the process is long enough.
With online loans like Aspire, the loan application process can be easier and faster – sending submissions only takes a matter of minutes and you will be confirmed in 24 hours.