What are the options in the food manufacturing industry?
Typically, manufacturers will either acquire the equipment outright by using cash reserves or shareholder equity, or going straight to the bank for a loan. There’s nothing wrong with this approach, however, if you need flexibility in your arrangement or labelling requirements change in the future, businesses will be restricted as a result of capital being tied up in the equipment.
Manufacturers could also look at refinancing existing equipment such as a SARB (sale-and-rent-back), giving the operator an immediate cash injection or by acquiring the equipment using an alternative capital solution.
Alternative finance is typically more flexible than a traditional loan. Yes, upgrades and maintenance can be added into the agreement, depending on what it is, but alternative finance can be so much more. It’s not just about giving a business an ‘off the shelf’ capital solution, it’s about understanding what the business’ challenge is, what they need to solve it and how we can get them there.
No two businesses are the same and nor should their finance solution be. What works for one business could be great, but for another it could only cause more problems. That’s why by working with an independent alternative capital funder, you not just get access to capital, but a tailored service to help your business.
At the end of the day, wherever the funding comes from, food and beverage manufacturers cannot afford to ignore the need to change. To stay competitive, keep products on the shelves, they must be ready to adapt.