When a West Coast-based natural food manufacturing company sought more funding than its incumbent bank lender could provide, it fed the order to Republic Business Credit for increased access to working capital. Republic approved a scalable and non-dilutive growth orientated facility that provided availability on their account receivables.
The natural food ingredient manufacturing company was looking to accelerate their growth across its products lines. Republic is a proud supporter of the natural food trade shows, including its regional associations, Naturally. The total food and beverage market is more than half a trillion dollars and continues to grow each year. The natural food and beverage category represent 10.5% of the volume, but nearly 30% of the dollar growth volume across the total industry, according to several sources.
Republic provided a $2.75 million ledgered line of credit facility to the company. Republic’s funding will eliminate the cashflow gap from the difference in timing from their suppliers and their customer payments. Republic structured the ledgered factoring facility to allow for extended terms without any financial covenants or field exam requirements. The company expects a strong close to 2020 and plans to ask for a facility limit increase in early 2021.
The food manufacturing company provides several unique ingredients to natural food brands across the country. The company sells to distributors, co-packers and manufacturers of healthy food products across the country. The rapidly growing company outpaced their sales targets in the midst of the COVID-19 pandemic and wanted a partner to help double its revenue next year.
“This debt facility will not only increase our ability to grow as a company, but it will allow us to retain a greater ownership of the company as we didn’t need to raise additional equity,” the founder told Republic shortly after closing.
“We believe our factoring, ABL and inventory lending products are great supplements to the vision of our growing portfolio of food brands.” Robert Meyers, Republic’s president, said. “We are excited to help enable our entrepreneurs to focus on adding revenue while knowing they have a supportive partner to weather any supply chain or growth issues they might encounter during the pandemic.”
“The food supply chain is critical to everyone’s well-being, we are excited to help so many food companies as they lead us into healthy food alternatives,” Stewart Chesters, Republic’s CEO, said.