A distributor pays weeks after you ship, and first orders and deductions stretch the wait. What shortens it for free, and the ways to fund what is left.
Last edited 5 min read
60 days after UNFI received a new supplier's first orders: that is when its published supplier policies paid the first invoices, and after that the standard was net 30, counted from the later of the invoice and the delivery.1 To cover the wait, most consumer brands factor the distributor's invoices, which pays most of each one within a day of billing; a brand with nothing to factor yet uses revenue-based funding such as Bridge Funding, and a brand that has to pay for production first uses purchase order financing. Before any of that, a few habits shorten the wait for free.
A distributor order is good news that turns into a cash problem: your co-packer, your packaging supplier and your freight carrier want paying weeks before UNFI, KeHE or a regional distributor pays you. This post covers why the wait is longer than the terms say, what you can do about it yourself, and the ways to fund what is left. We sell some of them, so check our work. It is not legal or financial advice.
Why does a distributor take longer to pay than its terms say?
Because the clock starts late, payment runs on cycles, and first orders and deductions run on their own rules.
- The clock starts at the later date. UNFI counts from the latest of receiving your invoice, its postmark and receiving the goods;1 KeHE from the later of receiving your invoice and receiving, counting and making the goods available for sale.2 An invoice sent a week after delivery starts the clock a week late.
- Payment goes out on a cycle. KeHE's payment is on time if it goes out on its first payment cycle after the due date.2
- First orders wait longer. KeHE holds initial orders into a new distribution center until they sell through, whatever your terms say.2
- Deductions net against payments. If you owe KeHE more than it owes you, it pays nothing until your balance is positive again.2
The distributor-by-distributor detail is in invoice factoring for brands selling through UNFI and KeHE.
What can I do to get paid sooner without funding?
Send a clean invoice the day the goods arrive, and keep your account with the distributor positive.
- Invoice on delivery, by EDI, matching the PO. KeHE asks for the invoice within 30 days of delivery, with its PO number, line items and ship-to location matching the PO.2 A mismatch is a delay you chose.
- Size the opening order to sell through. An initial order into a new KeHE warehouse is paid when it sells, and unsold stock from the first six months can come back to you. KeHE encourages suppliers to plan opening quantities with its supply chain team.2
- Watch deductions weekly. Promotions, slotting, free fills and shortages all come out of payments. Dispute the wrong ones inside the window (180 days at KeHE) before they pile into a negative balance.
- Know what early payment already costs you. On 2% 10, net 30 terms, a distributor that pays on day 10 instead of day 30 keeps 2% of the invoice. That is 2 ÷ 98 × 365 ÷ 20, about 37% a year, for 20 days. It is a price of money like any other, and it is worth comparing.
What are the ways to fund the wait?
Five options, on the two questions that decide it: does it cover a distributor's wait, and what does it need from you?
| Question | Covers the wait for payment? | What it needs |
|---|---|---|
| Invoice factoring | Yes, invoice by invoiceMost of each invoice, usually within 24 hours once set up | An invoice and a noticeThe distributor acknowledges a Notice of Assignment once |
| Bridge Funding | Yes, as working capitalUp to $500,000, sized on what your business already makes | Your bank accountNo Notice of Assignment; repaid as revenue comes in |
| Purchase order financing | No, it pays for making the goodsYour supplier is paid against the order | A signed orderAnd a Notice of Assignment |
| A bank line | Yes, if it is already in placeSteady and inexpensive for year-round use | Statements and collateralWeeks to months to set up, often a personal guarantee |
| Equity | Yes, and anything elsePermanent money for a temporary gap | Part of your companyMonths to raise |
Invoice factoring is the closest fit, because it turns the exact invoice you are waiting on into cash. A distributor is a good payer to factor against: the advance depends on UNFI or KeHE paying, not on your age or your balance sheet. How one invoice moves, day by day, is in how invoice factoring works.
Bridge Funding suits a brand whose distributor business is new or small, or that would rather the distributor saw no change. It is sized on your revenue, not on one invoice, and needs no notice to anyone.
Purchase order financing is for the step before the wait: paying your co-packer to make the order. Most brands pair it with factoring, and the big retailer order post works one order through both.
A bank line is the right tool when you will draw on it all year and it is already open. Equity is for needs that do not end when the distributor pays.
How much does it cost to cover a distributor's terms?
With Spring, 12% to 36% a year, charged on the money advanced and fixed before you sign.
The disclosure you sign before each funding shows the fee as one number in dollars, so you can weigh it against the alternatives. Compare it with what the wait costs you already: the 2% discount above, a production run you could not start, or a reorder you turned down.
Will my distributor know I am using funding?
With factoring and purchase order financing, yes. With Bridge Funding, no.
Spring requires a Notice of Assignment for every product except Bridge Funding. It asks the distributor's accounts payable team to pay your invoices to an account set up for you and that distributor, and your first funding waits on its acknowledgment, which takes days and occasionally a couple of weeks. UNFI and KeHE process these routinely. What a NOA says, line by line.
When is waiting the better choice?
When the gap is short or the margin cannot carry a fee.
- The distributor pays inside 10 days. If it takes the early-payment discount, you are paid fast already.
- The order is an opening order. Until it sells through, its payment date is not set; fund production, not the wait.
- You have cash that would sit idle. Using it is cheaper than any funding, ours included.
Frequently asked questions
How do I bridge cash flow while waiting on distributor payments?
Most consumer brands factor the distributor's invoices, which pays most of each invoice within a day of billing while the distributor keeps its terms. With nothing to factor yet, revenue-based working capital such as Spring's Bridge Funding covers the gap without a Notice of Assignment. To pay for making the order, use purchase order financing.
How long do UNFI and KeHE take to pay?
Your supplier agreement sets the days. UNFI's published 2014 policies set 2% 10, net 30, counted from the latest of invoice receipt, postmark and delivery, and paid first invoices after 60 days. KeHE starts its clock at the later of invoice receipt and the goods being available for sale, and holds initial orders into a new warehouse until they sell through.
Can I get an advance on a UNFI or KeHE invoice?
Yes, through invoice factoring. With Spring, the advance usually lands within 24 hours once the distributor has acknowledged a Notice of Assignment. Factoring UNFI and KeHE invoices.
Is factoring or a bank line better for distributor terms?
A bank line already in place is usually cheaper for money you draw all year. Factoring fits when sales to distributors are growing faster than the line, or there is no line yet, because it is sized on the invoices rather than your balance sheet.
What happens if the distributor deducts from my payment?
The payment arrives short. Without funding, it comes out of your cash. With factoring, it comes out of the part of the invoice the factor held back first. Dispute deductions you think are wrong inside the distributor's window: 180 days at KeHE.
Does Spring need a Notice of Assignment for Bridge Funding?
No. Bridge Funding is the one Spring product that needs no Notice of Assignment. Invoice factoring, purchase order financing and demand plan financing all do.
What does it cost to fund a distributor's payment terms with Spring?
12% to 36% a year, charged on the money advanced, and fixed in the disclosure you sign before funding.
If you are waiting on a distributor, get started or talk to the team.
1 UNFI, Supplier Policies and Guidelines (August 1, 2014), "Terms of Payment", filed with the SEC in Whole Foods Market's Exhibit 10.1, 2016, read October 2026. Your own UNFI supplier agreement sets your days.
2 KeHE Distributors, Supplier Policies & Procedures, effective November 1, 2025, sections 3.2 and 4.1 to 4.4, read October 2026.
