For years, distributor lending has mostly relied on physical collateral or bank guarantees. While these options offer some security on paper, they create real gaps that make lending rigid, risky, and harder to scale.
Physical collateral assumes a distributor owns significant assets like land or equipment. This locks out smaller, asset-light businesses. And even when assets exist, recovering funds after default is slow, involving lengthy legal and auction processes.
Bank guarantees on the other hand, shift risk but does not solve the visibility gap that exists. Once a guarantee is issued, banks lose sight of what happens next, whether products are picked up, sold, or payments are made. There is no live feedback loop, no system of checks, just a vague trust in paperwork and periodic reconciliations.
Flux offers a better way. Instead of relying on static assets or guarantees, banks can lend against real-time digital collateral: Product Receipts. Product Receipts are digital records that represent products, allowing banks to track product movement and ownership without paperwork. They provide live visibility into pickups, transfers, and payments — all in one system — enabling smarter, faster lending decisions with less risk.
This level of transparency unlocks a smarter lending model. Instead of a blanket approach where all distributors are treated the same, banks can assess credit decisions based on real operational activity. With Product Receipts representing each product picked up or transferred, banks can track how quickly distributors move products, how consistently they repay, and how they perform across different merchants or product lines.
From a risk standpoint, Flux de-risks distributor financing in a way traditional models cannot. If a distributor defaults or delays repayment, banks can instantly trace which products were picked up, from which merchant, and when — all through PRCs. This makes it possible to coordinate recovery plans, reassign inventory, or work with merchants directly, without chasing after physical assets or waiting months for legal enforcement.
At the end of the day, Flux is changing how banks approve lending. With product Receipts acting as digital proof of what is moving through the system, everyone involved — the bank, the merchant, the distributor — stays on the same page without second-guessing each other.
That kind of visibility means banks can lend with more confidence, respond faster when things go wrong, and support businesses that would have been overlooked in the old system.
Request a Demo on Flux and take the first step toward a more efficient, data-driven supply chain.