What Is Commercial Distribution Finance?
Last updated: November 2025
Business Finance Insights by Casey Asset Finance — helping Australian importers, wholesalers, and distributors access smarter funding.
When your business relies on buying, importing, or distributing stock before customers pay, cash flow can get tight.
That’s where Commercial Distribution Finance (CDF) comes in.
It’s a funding solution that helps importers, wholesalers, and distributors keep stock moving without using their own working capital to pay suppliers upfront.
Definition — In Simple Terms
Commercial Distribution Finance is a short-term revolving credit facility that allows you to purchase stock from suppliers or manufacturers without paying immediately.
Your financier pays your supplier directly for the goods, and you repay once your customers have purchased and paid for them.
It effectively bridges the cash flow gap between supplier payments and customer receipts — giving your business the breathing room it needs to grow.
How It Works in Practice
Here’s a typical example of how it works:
You place an order with a supplier (often overseas).
Your finance provider pays that supplier on your behalf.
Your stock arrives and is sold to customers over 30–90 days.
You repay once your invoices are paid or stock sells through.
It works much like a revolving credit line — you can continuously finance new inventory cycles without applying for a new loan each time.
You can learn more about how this works — and see real examples — on our Commercial Distribution Finance page.
Who Uses Commercial Distribution Finance?
In Australia, Commercial Distribution Finance is most commonly used by:
FMCG importers and distributors (food, beverages, packaged goods)
Retail wholesalers supplying supermarkets or restaurants
Seasonal suppliers that stock up before holidays or peak periods
Equipment or product distributors with long lead or payment cycles
If your business needs to hold stock before being paid, CDF can dramatically improve your working capital.
Example — How an Australian Importer Uses CDF
Let’s say you import Mexican-style sauces and canned goods from Los Angeles.
You need to pay your supplier $600,000 upfront to secure a shipment for your Australian clients.
Instead of draining cash reserves, your finance partner covers that supplier payment.
You bring the stock into your warehouse, sell to restaurants and retailers, and repay the facility once they pay their invoices
Result:
No cash strain. No missed orders. Suppliers stay happy, and your business keeps moving forward.
The Key Benefits
Improved cash flow – Keep your money free for operations and marketing.
Better stock management – Maintain healthy inventory during busy seasons.
Global supplier support – Pay international suppliers faster and build stronger relationships.
Flexible repayment – Pay down the facility as customers pay you.
Fast approval – Some lenders approve within 24–48 hours.
How It Differs from Other Business Finance Options
Many business owners confuse distribution finance with other types of lending, but here’s the difference in simple terms:
Trade Finance – Covers import/export invoices only and funds supplier payments directly.
Invoice Finance – Releases cash after invoices are raised and sales are made.
Commercial Distribution Finance – Provides cash before sales, allowing you to fund stock and inventory earlier.
Distribution Finance bridges the middle — it’s funding that covers stock-in-hand, not just what’s sold or shipped.
Some clients also combine this with a Business Line of Credit for even more flexible cash flow.
Why It’s Perfect for FMCG and Wholesale Businesses
Retail and FMCG distributors face three consistent challenges:
Stocking up early to meet customer demand.
Paying suppliers quickly to secure allocations.
Waiting weeks for customers to pay invoices.
Commercial Distribution Finance solves all three by keeping your working capital intact while ensuring supply chains keep moving smoothly.
How to Qualify
Every lender’s policy is a little different, but generally your business should:
Be trading for at least 12–24 months
Have consistent sales to known customers
Demonstrate reliable supplier and debtor relationships
Maintain a clean transaction record for inventory turnover
At Casey Asset Finance, we’ll help you identify the lenders that best suit your model — saving time and increasing approval odds.
Every lender is different — that’s why we workshop every scenario before submitting.
You’ll never hurt your credit or waste time applying with the wrong lender.
Next Steps — See If You Qualify
If your business imports or distributes goods and you’re tired of cash flow gaps between shipments and payments, this could be the perfect solution.
You can find more details on our dedicated service page below 👇
➡️ Explore Commercial Distribution Finance →
Or check if your business qualifies in under 30 seconds:
About the Author
Michael Pajar is the Director of Casey Asset Finance, a Melbourne-based business finance brokerage helping Australian SMEs secure funding through fast, transparent, and responsible lending solutions.
