Factoring for distributors: pay suppliers on time, even when customers pay in 60 days.
Distributors often have to pay suppliers in 10 to 30 days while their customers take 60 to 90. Factoring turns delivered invoices into cash, and 1st Commercial Credit adds tools for the buying side: purchase orders, trade payables and supply chain financing.
Daniel Chirino · Business Development Officer, 1st Commercial Credit
Updated: October 28, 2026
Why distributors run short of cash
You pay the supplier first and get paid by the customer much later. That gap limits how much you can buy, keeps you from taking early-payment discounts and makes a big purchase order a risk instead of an opportunity.
Seasonal distributors feel it twice: in peak season they need cash for inventory and labor, and in slow months the bills and payroll keep coming while sales drop.
How factoring works for a distributor
Deliver and invoice
Deliver the merchandise and invoice your customer with proof of delivery.
Get most of the invoice
1st Commercial Credit checks your customer's credit and advances most of the invoice value, within 24 hours.
Your customer pays 1st Commercial Credit
On its normal terms, and you receive the rest minus the fee. A non-notification option is available.
What 1st Commercial Credit offers distributors and wholesalers
The offer
- Rates from 0.69% to 1.59%, depending on your volume, how fast your customers pay and their credit.
- Approval within 3 to 5 business days, with same-day decisions.
- No upfront fees, no facility fees and no ongoing audits.
- No credit score requirement for you: 1st Commercial Credit reviews your customers' credit. Tax liens can affect eligibility.
- Four tools: invoice factoring, purchase order financing (including light assembly or repackaging on site), trade payable credit to pay suppliers early, and supply chain financing.
The 7 documents to get started
- The factoring application.
- Your accounts receivable aging report.
- Copies of the invoices you'd like to factor.
- Proof of delivery, such as signed delivery receipts or BOLs.
- Customer credit information.
- Business formation documents.
- A voided business check for ACH setup.
Source: 1st Commercial Credit's distributors page, read October 28, 2026. Rates and terms are confirmed in writing before you sign.
Produce distributors and PACA
Growers usually want cash at delivery or pickup, while customers expect 14 to 21 days. 1st Commercial Credit runs a produce program through its affiliate, Vendor Pay Express.
The produce program
- Rates from 2.8% to 3%, depending on your volume, how fast your customers pay and their credit.
- Initial funding in 3 to 5 working days. Then funds typically within 24 hours of invoice verification.
- No minimum or maximum: you choose which invoices to send.
- No financial statements up to $350,000, and no upfront fees.
Who qualifies
- At least 1 year in business and $50,000 a month in sales.
- Receivables not pledged as collateral to another lender.
- Sales to commercial accounts only, not to consumers.
- Payables lower than receivables, and a profit and loss statement that shows retained earnings.
Source: 1st Commercial Credit's produce distributors (PACA) page, read October 28, 2026.
A real deal
Published by Daniel on LinkedIn. See all deals.
When factoring is not the answer for a distributor
- Your customers pay on delivery or in under 15 days.
- You sell to consumers. Factoring works on invoices to businesses.
- For produce: you have less than a year in business or less than $50,000 a month in sales, or your receivables are already pledged to another lender.
- The problem is margin, not timing.
Questions distributors ask me
Will my customers know?
Not necessarily. 1st Commercial Credit offers a non-notification option for distributors. We'll talk about which setup fits your customers.
Can you pay my supplier directly?
Trade payable credit lets you pay suppliers early while you get extended terms, and it can replace letters of credit.
How fast is approval?
Decisions are made the same day, and accounts are usually approved within 3 to 5 business days.
Who are your customers?
Tell me who you sell to and how long they take to pay. I'll tell you which tool fits.
Also read: how invoice factoring works · manufacturing · trucking