Despite the fact that most of us eat three square meals a day, few people sit down to think about how food from across the world makes it to our local grocery stores. Yet so much work, coordination and planning to into harvesting our food and raising our beef, chicken and fish.
Ranchers, farmers and fishermen must work on a precise schedule to raise and prepare meats, chicken and fish so that it can be shipped and distributed to wholesalers and grocery chains. Unlike non-perishable products, food products require continuous refrigeration. As such timely transportation is a must or costly spoilage and waste could occur.
Pay Suppliers on Time with Factoring Receivables
To keep the farm-to-shelf cycle moving as it should a Nashville, Tennessee-based wholesaler of meat, chicken and fish needed to infuse cash into its business. Knowing that Agriculture Loans from a bank were hard to come by, the wholesaler looked to an invoice factoring company to obtain wholesale factoring.
Business Factors offered a $100,000 line of credit to the food wholesaler within 24 hours so it could pay its suppliers by their due dates. The company also used the money to better manage its schedule and operations.
Like many in the agricultural business, wholesalers and distributions are squeezed by grocers, who may take as long as 60-days to pay their bills. Despite this two-month lag, food wholesalers are required to pay their meat suppliers in 30-days or less. Such an unequal balance would pain just about any business particularly one with already slim margins such as the farm and agriculture sector.
Business Factors Provides Agriculture Financing When Others Don’t
By taking advantage of factoring receivables, the meat wholesaler was able to meet its financial obligations as well as dramatically improve its cash flow. It was able to better stay on top of orders and manage its operations because it knew ahead of time where money was flowing in and out of the company.
Though many invoice factoring companies won’t work with those in agriculture due to the inherent risks of the industry, Business Factors is happy to do so. It will sit down and work with food distributors, wholesalers and suppliers to provide much-needed invoice factoring services. With extensive financial backing and years of experience, Business Factors can take on the risks that smaller, lesser experienced factoring companies just can’t.