For distributors
Distributor finance
A facility to buy stock from an anchor, repaid on the agreed date whether or not the stock has sold. Revolving, so it is drawn and repaid rather than taken once.
The facts
- Who owes the money
- You, the distributor. You repay the financier on the agreed date, whether or not the stock has sold.
- Who decides
- Your financier, within the limit it sets in your anchor’s program.
- What you need
- A stock order with your anchor, within that limit.
- How the cost is shown
- A financing charge on the facility, stated when you confirm each drawing and repaid together with the financed amount on the repayment date.
- Who can offer it
- It depends on your program.
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.
Step 1 of 5Distributor: places a stock order with the anchor.
- A document
- Goods
- Money
Read the steps
- Distributor: places a stock order with the anchor.
- Distributor: requests financing for that order, within the limit the financier has set within the anchor’s program, and confirms the disclosed terms.
- Anchor: delivers the stock and invoices for it.
- Financier: settles the anchor’s invoice for the stock.
- Distributor: pays the financier the financed amount plus the financing charge on the repayment date, whether or not the stock has sold.
More about Distributor finance
Security
Security is usually taken: a charge over the stock you finance, which can be registered under the Movable Property Security Rights Act, 2017. Your anchor may also stop supplying you and, where that has been agreed, buy the stock back.In the agreement’s words: PS-4 ordinarily takes security. The typical package is a charge over the financed goods registrable under the Movable Property Security Rights Act, 2017, reinforced by the Anchor’s stop-supply and (where elected) buy-back.
Beside the other products for distributors
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.
What the documented framework says
Each statement is taken from the platform’s documented agreements and names the clause it rests on. Your own program’s documents govern, and none of this is legal advice.
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.
Distributor Master Participation Agreement, clause 2.1
If you default, your anchor suspends further credit supply until you are current again.
Distributor Master Participation Agreement, clause 4.1(b)
Every financing screen shows the full cost before you confirm: the amount financed, the total repayable, the due date and the effective annualized cost.
Distributor Master Participation Agreement, clause 1.2
Who can offer it, and how this page was checked
Which financiers offer this with your anchor is confirmed program by program. Ask us and we will tell you who offers it for yours.
This description has not yet been checked against the program documentation for this page. Where it and your financier’s agreement differ, the agreement governs.