For Fast Moving Commercial Goods (FMCG) businesses there is never a dull moment. With short shelf-lives and fast product sales, managing this high turnover can be fun and rewarding. However, it can also be a challenge, especially when it comes to typically slow-moving finance. So, what can FMCG businesses do to help improve their cash flow and growth? The answer lies in Selective Invoice Finance.
Growing Pains Of FMCG Businesses
If you’re an FMCG startup, then it is likely that your priority is to have considerable shelf-space in the leading supermarkets and retail outlets. However, when you transition from the small-scale retail units to the global players, finance terms become less negotiable.
For the distribution of food and beverage items, you can expect retailers to offer payment terms of between 90 and 120 days. As a growing SME, these lengthy waits for payments can significantly and negatively impact your cash flow. A lack of cash flow can limit your expansion plans and make growing your inventory and business difficult. However, when your business relies on maximising your shelf space, you can’t let cash flow difficulties get in the way of growing your food and beverage startup and landing the big contracts.
Manage Lengthy Payment Terms With Selective Invoice Finance
At GapCap, we know all too well the restrictive and extended payment terms that the big-brand retailers impose on startup FMCG businesses and growing SMEs.
Consequently, this is why we offer an innovative finance solution; Selective Invoice Finance.
Selective Invoice Finance works by providing you with an advanced payment of the invoices you send to your clients (debtors). Your growing SME simply needs to change the bank details on your invoices to your GapCap account and GapCap will pay you up to 85% of your invoice in advance, so you don’t have to wait for your client to get around to paying you.
Then, when your client pays the invoice, GapCap will release the remaining funds from the invoice, minus GapCap’s fee.
With Selective Invoice Finance, your food and beverage startup can enjoy a healthy cash flow that can facilitate growth and help you to land bigger and better contracts with leading retailers. Furthermore, you don’t have to let a client’s restrictive and lengthy payment terms restrict your working relationship.
How Selective Invoice Finance With GapCap Can Help
One of our favourite Selective Invoice Finance success stories is with popular drinks manufacturer Dash Water. When Dash Water landed a number of big-name stockists such as Ocado, Boots and Whole Foods, they found that many stockists had payment terms of 90 days or more.
To help free up their capital tied up in invoices, Dash Water enlisted the help of GapCap and GapCap’s Selective Invoice Finance solution. With the help of GapCap, Dash Water was able to unlock its cash flow from invoices to facilitate growth and brand building without any delay or cash flow difficulties.
If you want to unlock the potential of your FMCG business through innovative finance solutions, then get in touch with GapCap to find the best solution for your needs.