For an invented Tarboro, NC fastener wholesaler, the supplier bill and three Fridays of payroll come due before its largest customer pays: a 19-day gap. Working capital financing sized from the account's low point covers it, and the choice between a fixed loan and a revolving line turns on how often the gap comes back and whether customers ever pay early.
Size the need from the low point in the account, not from the customer's invoice. A line costs less when a customer pays early; a fixed loan keeps its schedule either way, and weekly payments can land inside the gap itself.
Working capital financing for the days between a supplier's due date and a customer's check
An invented Tarboro, NC wholesaler sells bolts, anchors and fittings to manufacturers and contractors. Its supplier gives 30 days to pay an invented $18,655 bill, and its largest customer pays an invented $26,315 invoice on day 49. Payroll of $4,215 goes out every Friday in this invented case.
Between day 30 and day 49 the invented account starts at $6,280, takes in $14,935 from smaller customers, and pays the supplier bill plus three Fridays of payroll, $31,300 in all. At its low point the balance sits at minus $10,085 (our arithmetic), so the invented need is about $10,085, not the $26,315 the customer owes.
That low point is the figure to bring to a call about working capital financing. The customer's invoice shows when the gap closes; the account shows how deep it gets.
Working capital loan or a revolving line when a customer pays early
A loan pays out one sum and keeps its schedule. A revolving line charges interest only while money is drawn. The difference shows when the customer's check arrives sooner than planned.
Drawn on an invented line at an annual rate of 13.9%, the $10,085 costs $72.97 in simple interest if the check lands on day 49, and $42.25 if it lands on day 41 (our arithmetic).
Taken instead as a six-month working capital loan of $10,685, sized above the $10,085 need so the same amount also covers the first weekly payment in the schedule comparison below, at an invented annual rate of 14.85%, the money costs $467.56 in interest across six monthly payments of $1,858.76 (our arithmetic). Funded on day 30, that invented loan's first payment falls due after the customer's check, and an early check does not shorten the schedule unless the loan terms allow early payoff and the owner uses it.
If the same gap opens on most large orders, the line's pay-as-drawn cost works in the owner's favor; one large order with a known date may sit more comfortably on the loan's fixed payments.
Daily, weekly or monthly payment schedules on the same invented amount
Working capital offers come with payments every business day, every week or every month. The table sets the invented $10,685 at 14.85% on a monthly and a weekly schedule over the same six months (our arithmetic).
| Schedule | Payments | Each payment | Total paid | Interest |
|---|---|---|---|---|
| Monthly | 6 | $1,858.76 | $11,152.56 | $467.56 |
| Weekly | 26 | $426.99 | $11,101.74 | $416.74 |
Weekly payments carry a little less interest here, because the balance falls sooner. They also start sooner: funded on day 30, the invented weekly schedule takes its first $426.99 on day 37, inside the gap, so the low point in this invented case drops to minus $10,512 and the request has to cover that first payment too (our arithmetic).
A daily schedule moves the same way further still: smaller amounts, more of them, and the first one the next business day. Matching the payment day to the days customer checks reach the account is worth asking a partner about.
Bank statement months that show a timing gap, not a loss
A partner may read several months of bank statements before a working capital offer. For a wholesaler, those months can show money out running ahead in one month and money in catching up in the next.
| Month | Money in | Money out | In minus out |
|---|---|---|---|
| First month | $61,240 | $68,905 | minus $7,665 |
| Second month | $74,380 | $63,170 | $11,210 |
| Third month | $66,915 | $67,030 | minus $115 |
| Quarter | $202,535 | $199,105 | $3,430 |
In this invented quarter the first month ends $7,665 short, yet across all three months money in exceeds money out by $3,430 (our arithmetic). That pattern reads as a timing gap. A business whose money out beat money in every month would be describing a loss, which no schedule repairs.
Wholesale Trade employers in Edgecombe County, NC numbered 24 in 2023, with 583 paid employees and $31.9 million in annual payroll (County Business Patterns). ZIP Code Business Patterns lists 12 wholesale employers at a ZIP 27886 address in 2023. Nonemployer Statistics counted 47 wholesale businesses with no paid employees in the county in 2024.
A wholesaler paid by check has few card sales, so a merchant cash advance, which is not a loan and is collected from card sales, may not fit this gap. The business loans page sets out all six funding types, and the other articles work similar gaps at a store and a kitchen.
By Riverview Business Loans · Updated
