Insights · Explainer · for anchors, suppliers and distributors
Distributor finance, described plainly
Distributors buy from an anchor and need stock before they have sold it. What the product is, who decides, and what a distributor gives in return.
Mtaji Insights
Published 30 October 2026. 2 min read.
Written by the Mtaji Insights desk and checked against Mtaji’s product terms and publication rules before release. Editorial standards
In brief
- A revolving facility to buy stock from your anchor: a credit facility to you, with recourse to you.
- You repay on the agreed date whether or not the stock has sold. The financier decides, not the anchor and not Mtaji.
- Access depends on several factors, including your past performance with your anchor and your own M-Score.
Suppliers sell to an anchor and wait to be paid. Distributors buy from an anchor and need stock before they have sold it. Distributor finance is the product for that second position, and its details matter more than its name.
What it is
A financier gives a distributor a facility to buy stock from its anchor, within a limit the financier sets inside the anchor’s program. The distributor requests financing for an order, the financier pays the anchor for the stock, and the distributor repays on the agreed date. As it repays, it can draw again within its limit.
It is a credit facility to the distributor, with recourse to the distributor. The distributor repays on the agreed date whether or not the stock has sold. The financed amount, the financing charge and the repayment date are stated before each drawing is confirmed.
Who decides, and on what
The financier makes the credit decision, on its own terms. Access depends on several factors, including the distributor’s past performance with the anchor and its own M-Score. A long, steady relationship with the anchor counts, because it shows a business that orders, sells through and pays, cycle after cycle.
The M-Score tells a distributor what it measures and what would improve it. It does not publish how the parts are weighed, and it does not make the decision.
What the distributor gives
Security is usually taken: a charge over the stock financed, which can be registered as a security interest over movable property. The anchor may also stop supplying a distributor that falls behind and, where it has been agreed, buy the stock back. These terms are set out in the financier’s agreement before the first drawing.
What it means for the anchor
Its distributors can order to demand rather than to the cash in hand, and the financier pays the anchor for the stock. The anchor does not lend, and the credit decision stays with the financier. Where the anchor agrees to buy stock back, that commitment is written into the program’s terms.
Questions to ask before the first drawing
When is each drawing repaid, and what happens if a date is missed? What security does the agreement take? How is the financing charge shown before you accept? Which financiers offer it with your anchor? A sound program answers each in writing before anyone signs.