Finance for Food Manufacturing

Food and drink manufacturing operations range from small units with few workers to large factories and multi-site organisations employing thousands of people.

With increasing demand for products that are healthier and also keeping costs to a minimum, there are many changes coming to the industry. New products, new processes and new equipment mean that any business in the food manufacturing sector needs a constant round of investment to remain competitive.

At Rangewell, we work with food manufacturing businesses across the UK. We can help you find the funding you need to take advantage of new technologies, and make the most of the funding options available to you.

Understanding your Funding Options

You may need to find the right type of  funding option to allow you to:

• Acquire premises

• Bring in and update equipment and assets

• Release cashflow by refinancing assets

• Finance growth

• Deal with tax

• Buy in/Buy out

• Provide working capital

Funding your premises

Asset Finance for the equipment you need

You may need a wide range of equipment to operate any kind of food manufacturing.  The list of equipment will depend on the area in which you specialise, but will range from bulk handling systems and washers to preparation and cooking facilities, packaging, refrigeration and despatch.

If you are ready to move from batch to continuous production, you may need to equip an entire production line, with costs starting in the millions.

The larger your business, and the greater the level of automation in your operation, the greater your needs may be. However, asset finance -  hire purchase and leasing - can help make virtually any type of equipment you need affordable. With asset finance, the equipment or ‘asset’, is used as the security for the loan itself.  This means that if you were unable to repay, the lender would simply repossess it, reducing the risk to the lender and the cost to you.

Hire purchase, contract hire and leasing are all forms of asset finance

Hire purchase

Hire purchase lets you spread the cost of buying high cost equipment you will use for the long term.  Arrangements generally last between 12 and 72 months. You pay a deposit plus fixed monthly instalments for the agreed term, after which the assets become yours.

Many equipment vendors will offer hire purchase facilities to support their sales. At Rangewell, we have found that arranging your own finance can be more cost effective.

Finance and operating leases

Leases work like a rental agreement  and let you spread the cost of equipment with no upfront payment.  This type of finance could be the best option for equipment which will have a limited life.

Contract Hire

If you have a distribution operation to support your food processing, contract hire could help you cut the cost of your fleet.

New and used assets

Pre-owned equipment can mean major savings compared with new equipment. We can help you arrange various types of Asset Finance for used equipment, allowing you to save twice - with both a reduced purchase price, and secondly by spreading the cost of finance.

Find out more about asset funding. <link>

Refinance existing assets

The equipment that your business already uses represents a considerable investment. Asset refinance lets you re-use that investment to fund any aspect of your business, while still having full use of your assets. The finance company will buy the asset from you, providing you with a cash sum. You then buy the asset back, with a new finance arrangement.

You can use asset refinance to release cash, or to replace existing finance deals to reduce your monthly outgoings. Find out more here. <link>
 

The costs of operating your business

There are several types of funding which can help you  deal with the costs of setting up and operating your business

Loans are the best known forms of business finance. There are two main types: Secured loans are ‘secured’ because the lender will require security in case you cannot pay the loan back. This could be your home, or your business premises. They can be used to borrow large sums of money, of £250,000 or more.

Unsecured loans can be suitable for smaller sums, from £5000 upwards, although some lenders will not let you borrow more than one month’s turnover with an unsecured loan.  

We can help you find the kind of loan to fit your needs. <link>

Cashflow funding

Cashflow is a major challenge for every business, especially if your trade is seasonal. Solutions include:

Revolving credit facilities

Revolving credit facilities bring a line of credit, with an agreed limit that you can call on when you need it. You only pay for the money you take out, so it can be a cost-effective way to raise funds if you need them.

Find out more about ways  to smooth your cashflow <link>

Invoice finance

Customers in the food industry, and especially large supermarkets can often take months to pay. Invoice finance can bring you cash as soon as you issue an invoice, providing a flow of cash that keeps pace with the amount of business you do.

Find out more about invoice finance <link TBA

Tax funding

Tax demands always seem to arrive at the most inconvenient moment. A tax loan can help you to spread the cost of VAT and annual tax demands into monthly payments, helping smooth your cashflow.

Our finance experts can help you deal with your tax bills<link>

Working capital finance

Operating your business will mean a number of ongoing costs. As well as staff costs, you will have waste disposal needs, and overheads such as utilities. Working capital finance is designed to give you additional working capital, helping  provide cash to pay staff and suppliers during the early weeks and months after opening or during a period of growth. It is designed to be repaid in the short term

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Our finance experts can help solve your working capital needs <link>

Should you consider Alternative Business Funding?

Buying in to an existing food manufacturing business

Buying an existing business with equipment and goodwill could offer immediate returns. Knowing the kinds of profit that can be generated will  help convince potential lenders that your plans are viable.

A secured loan could help you to borrow the large sums required for a uy in our buy out of an existing business.  You might also consider ‘jigsaw’ funding. This is a bespoke finance package, made up of a number of loan types, such as a commercial mortgage for the premises, with other loans to cover goodwill, and asset finance for the equipment.

Contact us to find out more about funding for buy ins and buy outs <link>

Funding for growth

How we help you capitalise your business

At Rangewell, our expertise works to bring you the financial solutions you need to capitalise your business, whether you want to fund capital expenses, working capital or growth.

We can help with every type of finance including Unsecured and Secured Loans, I Asset Finance, Commercial Mortgages, Growth Finance and more. We know the lenders who understand the food processing industry and the most competitive rates for all types of lending.

Whether you have a straightforward, small scale funding need, or require a complicated ‘Jigsaw’ funding plan made up of a combination of financial products, we can work with you to find the answers, streamline your application and help provide the funds you need.