The Latest Evolution With Global Distribution Finance
A specialist article by Gary McGugan, Senior Vice President, GE Commercial Distribution Finance. Distribution finance enables manufacturers, distributors and dealers of finished goods to use financial tools to sell more products through the distribution channel. It differs from traditional factoring and invoice discounting primarily because providers of distribution finance create contractual relationships with both vendors and debtors – a structured, three-party relationship that is driven primarily by the needs of the vendor. This relationship allows distribution finance providers to create financial programmes that are consistent with the manufacturer’s or distributor’s marketing strategies for his dealers and usually offers financing terms beyond the normal ‘open account’ terms provided by vendors.
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