Distributor finance
- What it is
- A credit facility
- Who the financier looks to
- You
For distributors
Buy the stock you can sell. Pay for it later.
You sell everything you can carry, and the ceiling is the cash you hold, not demand, not your margin, and not how well you run the business. Every order you cannot fund is revenue that simply does not happen.
Under Distributor finance, you carry the obligation. It is a credit facility to you, with recourse to you, and you repay it. Access depends on several factors, including your past performance with your anchor and your own M-Score.
What is an anchor?
Your anchor
The large company you buy stock from to resell. That company is your anchor.
It confirms your order
Your anchor runs a program on Mtaji and confirms each stock order you place.
A bank pays for the stock
A bank in the program pays your anchor for the order, and you repay the bank on the agreed dates.
How it works
Who owes the money: Under Distributor finance, you carry the obligation. It is a credit facility to you, with recourse to you, and you repay it. Under Shariah-compliant dealer finance, you owe the agreed price of the goods you bought. You pay the agreed price on the agreed dates. It is a binding obligation: if you pay late, recovery follows documented Sharia principles.
Step 1 of 5Distributor: You place a stock order with your anchor.
- A document
- Money
- Goods
Read the steps
- Distributor: You place a stock order with your anchor.
- Distributor: You request financing for the order on the platform.
- Financier: The financier settles the anchor’s invoice.
- Anchor: Your anchor delivers the stock to you.
- Distributor: On the repayment date you repay the financier, whether or not the stock has sold.
Three steps
You order
Your financier approves and pays your anchor
You repay by the due date
Two structures, two different contracts
Shariah-compliant dealer finance
- What it is
- A sale on deferred payment terms: you buy the goods from the financier
- Who the financier looks to
- You
What it costs
On a conventional facility, interest and fees, set out in the term sheet. On the Sharia-compliant option the price is the financier’s cost plus a fixed profit, disclosed before you commit and unchanged by time. Either way you see the full cost and the repayment schedule before you draw, and each product page sets out what you owe under it.
Every financing screen shows the full cost before you confirm: the amount financed, the total repayable, the due date and the effective annualized cost.
Questions
Is this a loan?
It depends which structure your program uses, and the difference is not cosmetic. A conventional distributor facility is credit: treat it as credit and read the terms as credit. Our Sharia-compliant option is a Murabaha sale, not an interest-bearing loan. The financier, as Master Distributor, buys the goods from the supplier and sells them to you at an agreed profit. You pay the agreed price on the agreed dates. It is a binding obligation: if you pay late, recovery follows documented Sharia principles. You are told which before you draw, and the obligations differ.
Will it affect my CRB listing?
On a conventional distributor facility, yes. You consent to your financier reporting the facility and your repayment conduct to the credit reference bureaux, and that consent is a term of the agreement rather than something decided later, which bureaux, and how, follows your financier’s own arrangements. Repaying on time builds your record and missing payments damages it.
What happens if I do not repay?
You are pursued for the money under the terms you signed. On a conventional distributor facility that conduct is reported to the credit reference bureaux and it damages your record there. Security taken over the facility can be enforced. We would rather you knew that on this page than found it out afterwards.
On the buy side you are always liable to repay. Both structures are financing you must honor whether or not you have sold the goods.
If you default, your anchor suspends further credit supply until you are current again.
What should I ask before I draw?
- Which of the two structures is my program, and which agreement names it?
- What secures the arrangement, and must it be registered before the goods are delivered?
- What is my limit, and how is it drawn, repaid and reviewed?
- What exactly is reported to the credit reference bureaux, by whom, and what have I consented to?
- What happens if I pay early, and what happens if I pay late?
Next: tell us who you trade with
Invited by your anchor? Open it to join.
Not sure where you stand? The free readiness check.
Also sell to an anchor? Get paid early for goods you have already delivered.