Finance for wholesale and trade businesses
You’re funding both ends of the cycle at once, paying suppliers before you’re paid by customers. The right structure covers the whole gap, not just one side of it.
General information only
Wholesale and distribution businesses sit in the middle of a cash cycle they don’t fully control: paying suppliers on one side, carrying trade credit for retailers or customers on the other. Trade finance and invoice finance are built for exactly this shape of business, and the two products cover different halves of the same gap.
Why trade facilities are about peace of mind, not just borrowing
A trade facility means you can buy the stock when the order lands, without a fresh application every time. You don’t have to draw on it. It sits there as capacity, not a debt you carry by default, and the time to set it up is before the big order arrives, not after. See our trade finance page for how the facility itself works.
Funding both ends of your cash cycle
Depending on who you sell to, it can make sense to package invoice finance and trade finance together, one covering what you owe suppliers, the other covering what your customers owe you. Structured correctly, these facilities wash themselves: money from collected invoices funds the next round of stock.
- 01Trade finance covers the gap between paying your supplier and receiving the stock, typically domestic purchases from another Australian supplier, sometimes overseas.
- 02Invoice finance covers the gap on the other side, advancing against what your own customers owe you once you’ve supplied them, often up to 90% of the invoice.
- 03Together, collections on one side pay down the other, so the business isn’t carrying the whole gap itself.
Put numbers on that, because timing is where it usually goes wrong. On a typical import-and-resell run (pay the supplier on day 0, 45 days of production and transit, 30 days of stock on hand, then 60-day customer terms) there are 135 days between cash out and cash in. Most trade finance facilities cap at 90 to 120 days, so used on its own the facility falls due roughly 15 days before the money arrives.
Run together, the arithmetic resolves. Trade finance funds days 0 to 75, and at day 75 the invoice exists, so invoice finance advances 80% to 90% of it and retires the trade facility 60 days earlier than the customer would have paid, and comfortably inside the cap. That’s what “self-funding” means here, and it’s why the 90 to 120 day limit is a design assumption rather than a problem. The full working is on the invoice finance vs trade finance comparison.
Trade finance or invoice finance alone
If only one side of your cycle is tight, whether that’s paying suppliers upfront or waiting on customer payment, a single facility matched to that gap is usually the simpler and cheaper structure.
Trade finance and invoice finance combined
If you’re funding stock purchases and carrying customer terms at the same time, packaging both facilities together, so collections on one side support the other, is what removes the cash pressure.
Unused, it costs you nothing beyond having it. The value is that it’s there when the order comes in.
Sourced data: Defence Connect
“Access to capital is the single greatest barrier to SME entry” into the defence supply chain, ahead of certification, ahead of technical capability.
Steve Kuper, Momentum Markets, at the 2026 Australian Defence Industry Accelerator Summit
Is the AUKUS build relevant to a wholesale business like mine?
A new opportunity is opening up for wholesale and distribution businesses right now. The AUKUS submarine build is creating real demand for Australian suppliers, and funding, not supply chain access, is turning out to be the barrier most businesses hit.
Size that against a flat sector. The ABS counts of Australian businesses show wholesale trade business numbers grew just 0.5% in 2025-26, against 3.1% across all industries. In a sector barely adding businesses, new work is usually taken from a competitor rather than won from growth, and that’s exactly when being able to fund a larger order matters.
If you’re even considering becoming a supplier, the practical first step is usually working capital or asset finance to scale up production, not the certification process. That’s the kind of funding gap a broker with a wide non-bank panel is built to close.
Steve Kuper of Momentum Markets: access to capital is the single greatest barrier to SME entry, ahead of technical capability.
Why does working capital matter so much in wholesale?
Because the margin is thin and the stock is enormous. Wholesale trade runs on 6.2% gross operating profit against sales, second thinnest of the fifteen industries the ABS measures. It also carries inventories worth 47.8% of a quarter’s sales, roughly six weeks of trading sitting on a shelf before a dollar comes back.
| 2025-26 | Gross profit on sales | Stock held, as share of a quarter’s sales |
|---|---|---|
| Manufacturing | 9.9% | 54.5% |
| Wholesale trade | 6.2% | 47.8% |
| Retail trade | 5.5% | 32.7% |
| Construction | 7.6% | — |
| Accommodation and food services | 8.4% | 6.1% |
| Transport, postal and warehousing | 19.2% | — |
Derived by us from ABS Business Indicators, June quarter 2026 release, tables 3, 6 and 15, financial year to June 2026. Gross operating profit is before interest, tax and depreciation. It isn’t net profit. The ABS covers fifteen industry divisions, not every industry. Dashes mark industries where the ABS does not publish an inventories series.
Put those two columns together and the whole case for trade and invoice finance is in them. On a 6.2% margin, a wholesaler keeps about six cents of every dollar of sales before interest and tax. Funding six weeks of stock out of that six cents is arithmetic that doesn’t work. That’s why the stock gets funded, not saved for.
It also explains why a delayed payment hurts here more than almost anywhere. A customer paying 30 days late on a 6% margin costs you far more, proportionally, than the same delay costs a business running at 19%.
And it’s getting tighter, not looser. In the June quarter 2026 the ABS recorded wholesale trade gross operating profits down 2.9% and retail trade down 5.2%, while total company profits rose 1.8% on the back of mining. The two thinnest-margin industries were the two moving backwards.
How long do wholesale businesses last?
Longer than most. 63.2% of wholesale trade businesses trading in June 2022 were still trading four years later, against 61.9% across all industries. New entrants have it harder: of wholesale businesses that started in 2022-23, 45.6% reached three years, below the 49.2% national average. Established beats new by a wider margin here than in most industries, which is roughly how a lender reads a wholesale file too.
Source: ABS Counts of Australian Businesses, business survival and entries survival, June 2022 to June 2026. Survival counts businesses still operating, so a business sold or wound up solvently also leaves the count. It isn’t a failure rate.
Why work with a broker instead of comparing lenders yourself?
Getting trade and invoice finance to wash themselves takes more than picking two products off the shelf. The facility limits, timing and lender pairing all matter. A broker who’s placed this combination before can set it up so it reduces your cash pressure, not just shifts it. (More on how a business loan broker works.)
A deal Andrew worked on before starting Ecommerce Loans. A wholesale bakery that also ran several cafes around Sydney came through a referrer. It was paying more than it should have on its existing working capital loans. The first step was refinancing into a better unsecured product: $250,000 with one lender, inside that lender’s alt-doc limit. Then, to fund a new contract, the business raised a further $150,000 against its commercial kitchen equipment with a second lender. Other lenders wouldn’t add funding with an unsecured lender already on the file. Structuring it across two lenders, each within its own policy, took the business to close to $400,000, and got it done quickly.
When a single facility is enough
Not every wholesale or distribution business needs both facilities running at once. If your supplier terms are already generous, or your customer base pays quickly and reliably, adding a second facility just to have it can cost more than it solves. Be honest about which side of the cycle is under pressure before you commit to a combined structure.
Funding one side of the cycle, or both?
Tell us how your supplier and customer terms work and we’ll tell you whether one facility covers it, or whether combining trade and invoice finance is worth structuring properly.
Give us the basics below and we’ll call you within the hour, or at the time you choose, then come back with the two or three offers worth your time.