Supplier Requires Full Prepay After Line Approval
Recalculate available credit and cash when a supplier changes from a deposit to full prepayment before shipping inventory.
In this guide
Quick answer
Get the updated purchase terms in writing and confirm what the lender will fund. Compare the new upfront amount, line availability and usable draw proceeds. Then test the period from supplier payment to delivery and customer receipts.
Records to collect
Collect the old and new purchase orders, payment deadline, shipping terms, line agreement and latest availability. Verify the supplier through a known contact if payment details changed. Ask whether the new terms affect eligibility, supporting documents or the lender’s funding timeline.
Worked example
The original order is $18,000 with $6,000 deposit. The supplier now requires $18,000 before shipment. The business has $4,000 allocated and $12,000 gross draw availability. A 1% fee withheld from the full draw leaves $11,880, making total available project cash $15,880 and the immediate shortfall $2,120. This excludes any other costs and assumes the draw is authorized.
| Checkpoint | Amount |
|---|---|
| Revised upfront amount | $18,000 |
| Maximum entered net draw | $11,880 |
| Gap after project cash | $2,120 |
What to confirm before committing cash
- Verify the effective order and any cancellation terms.
- Ask the lender what purchase evidence it needs.
- Map the first debt payment before goods become saleable.
Test a changed date or amount
If the supplier offers a documented $13,500 first payment and $4,500 on delivery, initial cash may cover the first milestone while leaving $2,380 from the entered pool. The later installment still needs another $2,120 unless funds change. Include shipping delays and verify each date before accepting.
Frequently asked questions
Does an approved limit guarantee same-day funding?
Check actual availability and draw conditions.
Can the original deposit schedule still be used?
Use the confirmed replacement terms or a documented exception.
What if the supplier also changes bank details?
Verify the change independently before authorizing payment.
Sources and next calculation
The example uses original hypothetical figures. Check the actual contract, provider record and applicable account terms. Source checked November 11, 2026. SBA financial management guidance.
Check net proceeds from a line draw.
Use the funding timeline checklist to distinguish the confirmed loan amount from money the bank or creditor can actually use.
Explore this topic further
Check your assumptions with these tools and related guides.
Try a relevant calculator
- Equipment Deposit and Delivery Financing Gap Calculator — Estimate cash due at a supplier deposit and again at delivery when financing funds later.
- Mortgage Repair Holdback Cash Timing Calculator — Estimate how much cash a repair reimbursement arrangement requires before a release arrives.
- Personal Loan Affordability Calculator — Use take-home income, living costs and a buffer to estimate a loan payment budget without an approval promise.
- White Plains Renovation Temporary Housing Budget Calculator — Estimate the cash needed for a White Plains renovation that requires temporary relocation.
Read related guides
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- Compare a Higher Car Insurance Deductible With the Savings It Requires
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Further reading
This guide is general education, not personalized financial advice. Rates, limits and rules change; confirm current figures with the lender, issuer or agency before you act. See our financial disclaimer and affiliate disclosure.
