Invoice finance for food and drink producers
Food and drink producers often deliver well before a retailer or distributor pays. Funding eligible trade invoices may help replenish cash spent on ingredients, packaging and production.
Positive Funding Limited is a finance broker. Funding is subject to provider assessment and agreed terms.
Cash has to return before the next batch begins
Producing another batch takes cash even when the last delivery sold well. Retailer payment runs, credits and commercial deductions can leave a gap between sales recorded and money received.
Invoice finance addresses qualifying receivables. It does not finance unsold products automatically or remove the cost of waste, rejected deliveries and weak margins.
Assess the net debt
Account for rebates and deductions before estimating usable funding.
Keep delivery evidence
Accepted quantities and customer records help support the amount invoiced.
Forecast busy periods
Show how seasonal demand changes both production costs and debtor balances.
From accepted delivery to an advance
Evidence what was supplied
Match the invoice to the customer order and delivery confirmation. Record shortages, returns or rejected goods separately.
Agree eligibility and limits
The provider considers buyer risk and contractual deductions before calculating availability. Large customer balances may be subject to individual limits.
Reconcile the retailer payment
Allocate receipts and deduction notices against the ledger. The balance due back depends on advances already drawn, charges and any credits.
Retailer deductions can change the funding calculation
Promotional contributions, volume rebates and quality claims can make the face value of an invoice an unreliable guide to cash. Explain the commercial agreement and how deductions appear on remittances. Accurate reconciliation helps avoid drawing against amounts that will not be collected.
Choose a facility that fits your accounts process
Invoice factoring
Factoring may add support for customer statements and overdue accounts. Ask how the collections team will handle retailer portals and disputed deductions.
Invoice discounting
Discounting keeps that work with your staff. It requires reliable records of sales, receipts and credits as well as provider approval.
Selective invoice finance
If one distribution contract creates a temporary shortfall, selected-debt funding may be considered. Compare its scope with your ongoing production cash needs.
Compare factoring and invoice discounting before choosing who manages collections.
Illustration: financing an accepted batch
An eligible £52,000 trade balance at an assumed 80% advance gives £41,600 initially. The remaining £10,400 is before fees. If a rebate reduces the eligible debt, the calculation must use that lower amount.
The percentages are illustrative and do not establish eligibility for a particular retailer.
Price the actual pattern of receipts
Use real settlement times and historical deductions when requesting a cost illustration. Include minimum service charges in quieter production months, funding charges while advances remain outstanding and optional protection costs. Our cost explanation helps distinguish fees from retained balances.
Have trading terms and remittances ready
Useful records include your debtor ageing, retailer contracts, recent remittance advice and accounts. Explain returns, shelf-life issues affecting acceptance, seasonal peaks and existing finance. A sales forecast alone will not show the receivables a provider can fund.
Food and drink invoice funding questions
Does the facility finance ingredients before manufacture?
Standard receivables funding starts from an acceptable customer debt. Pre-production spending needs separate planning until qualifying sales exist.
Can supermarket balances be included?
They can be assessed, but buyer approval is only part of the review. Deductions, payment terms and contractual rights also affect availability.
What happens when a delivery is rejected?
Tell the funder and update the receivable. A rejection may remove or reduce the debt supporting the advance.
Is a seasonal producer automatically unsuitable?
No, but the facility must work through both peaks and low-volume periods. Discuss forecasts, minimum fees and the cash needed between seasons.
Discuss your production-to-payment gap
Give Positive Funding an outline of your trade customers, outstanding deliveries and next production commitments. We can explore funding in the context of the amounts you expect to collect.
Funding is subject to eligibility and provider agreement. Fees, guarantees and security requirements vary. Explore other business sectors.