No industry is invulnerable to risk, including wholesalers. Banks may be hesitant to loan to this industry due to the following:

Cyclic nature: fluctuations in demand, market conditions, and economic downturns, can potentially increase the risk of loan defaults.

Property & Inventory loss: companies utilizing warehouses and storage facilities face operational risks on account of potential damage and loss from fire, smoke, water, natural disasters, and severe weather. Dependence on a single storage location makes their business particularly vulnerable to disruption in the event of a loss.

Supply chain challenges: Recent global challenges have highlighted significant vulnerabilities in supply chains. Operational disruptions and order fulfillment issues have arisen because of shipping delays, material scarcity, and recently, tariffs.

Private credit is a great alternative thanks to its organizational flexibility and less stringent regulation. It allows for tailored risk assessment and customized solutions, providing significant advantages to the wholesale trade sector.

For instance, one of Flatbay Capital's clients is a Texas-based industrial and maritime product distributor and faced significant challenges during COVID-19, including shutdowns, price increases, the departure of the company's founder, and a warehouse fire. In 2024, they sought to increase their credit facility. However, their historical financial performance made traditional bank financing unavailable, leading them to Flatbay Capital.

Understanding the client’s turnaround plan, Flatbay Capital was able to supply a $1.5MM commercial real estate line of credit to pay off existing notes and provide cash out for working capital needs.

Do you have any wholesaler clients or have a company in need of private capital from a non-bank entity? Learn about our financing solutions at: https://www.flatbaycapital.com/financing-solutions