Dealers buy more, faster
Inventory funding against your invoice lets distributors place bigger orders and restock ahead of demand — offtake stops being rationed by the dealer’s bank balance.
Let your channel buy more — without tying up its cash.
Dealer & Channel Finance, Inventory Funding for Your Distributors
Dealer (channel) finance is the downstream side of supply chain finance — a financier funds your distributors’ purchases against your invoice on them, so they can carry more stock while you’re paid upfront. Because the funding rides the anchor link rather than each dealer’s standalone balance sheet, your channel grows without tying up your working capital. We structure it across banks, NBFCs and TReDS. Part of Finnova’s ₹4,250 Cr+ mobilised across 100+ corporate-finance mandates since 2011.
Bank · NBFC · TReDS Rides the anchor link Anchor paid upfront
Finnova’s corporate-finance track record since 2011, in numbers
₹4,250 Cr+
Capital mobilised across sectors100+
Deals advised end to end3
Channels — bank, NBFC & TReDSUp to ~90%
Of invoice value funded (indicative)Since 2011
CA / ex-banker, senior on every fileDealer (channel) finance is a downstream supply chain finance structure: a financier funds a distributor’s purchases against the anchor’s invoice on the dealer, so the dealer buys more stock while the anchor is paid upfront. It is one structure within SCF — alongside upstream vendor finance and reverse factoring — usually arranged with recourse to the dealer (non-recourse where credit-insured). See the full supply chain finance practice.
Finnova Advisory is an advisory firm — we structure the programme and negotiate terms; the bank, NBFC or TReDS financier sanctions and disburses.
What dealer & channel finance does
Fund the channel’s inventory, free your own capital
Your distributors can only buy as much as their cash and bank limits allow — so when offtake grows or a season peaks, orders stall on their working capital, not on demand. Dealer finance funds the purchase against your invoice on them, so the channel keeps moving while you’re paid upfront. It’s the downstream half of the supply chain finance programme.
You’re paid upfront
The financier funds the dealer’s purchase, so your receivable converts to cash at dispatch instead of waiting out the dealer’s credit period.
Priced on the anchor link
Limits are set on the dealer’s track record and its link to you, so the channel accesses funding it could rarely secure standalone — and your capital stays free.
Distributor self-funding vs channel finance
Side-by-side — where the offtake is freed
Same goal — your distributor carrying enough stock to meet demand — but self-funding caps orders at the dealer’s own cash, while channel finance funds the purchase against your invoice. Here’s the difference that shows up in offtake and your receivables.
| What changes | Distributor self-funding | Channel Finance |
|---|---|---|
| What changesOrder size | Self-fundingCapped by the dealer’s own cash and bank limits | Channel FinanceDealer can buy more — funding rides the anchor link, not just its balance sheetBigger orders |
| What changesYour receivables | Self-fundingYou wait out the dealer’s credit period or carry the risk | Channel FinanceYou’re paid upfront; the financier carries the funded legPaid sooner |
| What changesChannel growth | Self-fundingRationed by how much working capital the dealer can spare | Channel FinanceChannel scales without tying up the dealer’s — or your — capital |
| What changesPricing | Self-fundingDealer borrows at its own standalone rate | Channel FinancePriced on the anchor link — indicative ~7.5–12% p.a. (bank/NBFC, per case) |
| What changesRecourse | Self-fundingDealer funds itself; no third party | Channel FinanceUsually with recourse to the dealer; non-recourse where credit-insured |
Indicative — actual advance, rate, recourse and acceptance depend on the lender, the anchor’s rating and the dealer’s profile. We size it precisely for your channel. Read more on distributor & channel finance in India.
How Finnova helps
From channel map to live dealer drawdowns
We read your distribution the way a banker and a treasurer both would — map the dealer base, match the right channel mix and lender, and onboard your distributors so the funding actually flows.
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Map the channel & offtake
3–5 daysWe map your distributor base, order cycles, seasonality and target ticket sizes — the shape and limits of the programme are set against real offtake.
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Match lender & channel mix
2 daysWe shortlist the banks and NBFCs whose appetite for your sector and dealer profile fits — and decide where recourse, insurance or a TReDS leg makes sense.
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Structure & sanction
2–3 weeksWe compile the anchor and dealer pack, negotiate rates, limits, tenor and recourse, and get the programme sanctioned at terms that clear credit committee.
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Onboard dealers & go live
on sanctionWe onboard your distributors on digital KYC, go live, and scale limits as offtake grows — rolling into vendor finance upstream where it fits.
Who it’s for & what a strong case needs
Built for anchors that sell through a dealer network
If you distribute through dealers and offtake is growing faster than their cash, channel finance unlocks the next order without straining your balance sheet — and we know what makes a clean lender case.
Sectors we serve
CA- and ex-banker-led, Pune & Mumbai-based, serving anchor ecosystems pan-India.
What makes a strong case — indicative documentation
- Last 2 years’ audited financials of the anchor
- Dealer / distributor master with offtake history
- GST returns (anchor and sample dealers)
- Sample invoices, POs and dealer agreements
- KYC of anchor, dealers and authorised signatories
- External credit rating of the anchor (sharpens pricing)
Indicative — varies by lender, sector and dealer profile. See the full SCF programme design approach, or how SCF works for FMCG distributors.
Consultation
Want your channel to buy more? Let’s size it
One conversation tells you whether channel finance fits your distribution, which lenders will write it, and how fast it can go live before your next season. No pitch — a straight read from people who structure anchor programmes every week.
Thank you — your enquiry has been submitted
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FAQ
Dealer & channel finance, answered
Dealer (or channel) finance is a downstream supply chain finance structure where a financier funds a distributor’s purchases against the anchor company’s invoice on the dealer — so the dealer can buy more stock without locking up its own capital, and the anchor gets paid upfront. It is one structure within the broader supply chain finance toolkit, sitting alongside upstream vendor finance and reverse factoring.
Dealer and channel finance is usually arranged with recourse to the dealer (the drawer remains liable on default), unlike TReDS, which is without recourse to the MSME seller. Some programmes are structured non-recourse where credit insurance is in place. Limits are set on the dealer’s track record and its link to the anchor, and we structure recourse to match the anchor’s risk appetite.
It fits any business that sells through a distributor or dealer network — FMCG, auto (OEM-to-dealer), consumer durables, pharma, building materials and agri-inputs are the most common. Wherever distributors carry inventory and offtake is seasonal or growing faster than their cash, channel finance unlocks the next order without straining your own balance sheet.
Pricing is a discount or interest on the funded amount, indicatively ~7.5–9.5% p.a. through a bank and ~9–12% p.a. through an NBFC, with the advance typically up to ~80–90% of invoice value. The rate rides the anchor’s credit rating and the dealer’s profile — it is not a fixed number. Finnova obtains firm quotes from shortlisted lenders for your programme.
Vendor finance is upstream — it pays your suppliers early against invoices you have approved. Dealer (channel) finance is downstream — it funds your distributors to buy from you, against your invoice on them. Both ride the anchor’s credit, but one frees liquidity for the people who sell to you and the other for the people who buy from you. Many anchors run both as one channel-finance programme.