Finance for Food Manufacturing
Financial solutions for equipment, premises and supplies - and moreSpeak to one of our experts020 4525 5312
- Commercial mortgages from 2% above base rate
- Secured loans - £250,000 or more from 2% above base rate
- Refinance existing property assets
- Property leasing
Building your business
- Asset finance - providing machines and equipment
- HP up to 60 months from 6%
- Equipment Lease - with no capital costs
- Working capital loans
Running your business
- Cashflow support
- Working capital loans
- Export finance
- Invoice finance
The food manufacturing industry is made up of many sectors from bakery to dairy, confectionery and frozen foods. All require specialised funding solutions.
Table of Contents
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
If you are setting up, growing an existing business, or simply looking at investment to maintain your current level of profitability, getting the right funding option is essential.
You may need to find the right type of funding option to allow you to:
Bring in and update equipment and assets
Release cashflow by refinancing assets
Deal with tax
Buy in/Buy out
Provide working capital
Funding your premises
Premises can represent a major investment for any food manufacturing business. The cost of renting a small suitable industrial unit will be high, and will have service charges and business rates on top of the bare lease. You may need upfront funding to secure the agreement - we can provide a number of solutions to help you.
However, renting means ongoing costs, and puts your business at risk of rent increases. Buying your premises with a commercial mortgage could actually decrease your monthly outgoings, and provide your business with a valuable asset for the future.
Find out more about funding to lease or buy your premises. <link>
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 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.
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 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>
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 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
Our finance experts can help solve your working capital needs <link>
Should you consider Alternative Business Funding?
Find out more about alternatives here <link TBA>
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.
REAL EXAMPLES OF WHAT WE CAN DO
Find funding to allow a new operator to set up a production line – with no upfront costs
Help a small bakery double its production with new ovens and equipment
Source a lease arrangement to equip a ham smoker
Find the most competitive finance to provide delivery trucks for a cake manufacturer
Help arrange finance for an established brand ready to buy a complete turnkey factory
Discover our range of finances
Every type of finance for every type of business
Our goal is very simple - to help businesses find the right type of finance as quickly, transparently and painlessly as possible.
Helping you build your profits
Lending tailored to your business needsAt Rangewell we can help you find the most appropriate finance for any funding need. We save you money and help you move your business forward.
Equipment funding scaled to your businessFunding solutions are available whether you need individual items or a complete production line.
Supporting your developmentIf yours is a new business it will face challenges in the early days. We can help you find the funding you need until your customer base is established and your cashflow secured.
Reducing risk with asset fundingIf your business was unable to make the payments on an asset funding deal, the lender could simply repossess the equipment to cover their loss. No other assets are at risk.
Helping you grow your businessWe can work with you to answer your changing finance needs as your business grows and develops.
Lenders who specialise in the sectorAt Rangewell, we can help you find the most appropriate lenders for your food processing operation.