Sauce makers, bakeries, bottlers and packers buy ingredients and packaging long before a retailer pays. Working capital covers that stretch between the purchase order and the check.
Apply Now →A food producer's cash moves in an awkward order. Ingredients, labels and cartons are bought first. Labor and kitchen or plant time come next. Only after the product ships, and after the buyer's payment terms run, does money come back. A big wholesale order is good news and a cash strain on the same day, because the bigger it is, the more you must spend before you see any of it.
New York producers feel this in different ways depending on where they sell. A bakery supplying cafes works on short delivery cycles. A packaged-goods brand selling to grocers and distributors often waits on wholesale terms. A craft beverage maker may carry finished inventory for weeks while it ages or waits for a distributor's next pickup.
| Stage | What you pay for | When cash returns |
|---|---|---|
| Sourcing | Ingredients, packaging, labels, shipping cartons | Only after the order ships and is paid |
| Production | Labor, utilities, shared-kitchen or plant time | Same as above, plus any aging or curing time |
| Equipment | Mixers, fillers, ovens, coolers, labeling and sealing lines | Over years, through added capacity and lower waste |
| Wholesale | Delivery, slotting or promotional costs, spoilage risk | After the buyer's payment terms run |
Working capital suits needs that pay for themselves quickly: a bulk ingredient purchase at a better unit cost, packaging for a seasonal run, a second shift to fill a large order, or a piece of equipment that removes a bottleneck. It suits less well a product with no confirmed buyer, or a cost that never turns back into sales.
One practical test is to trace the dollar. If you spend it on cartons and flour, when does it come back as a payment, and is that date earlier than your next payroll? If the answer is a few weeks later than payroll, the bridge is the problem to solve.
For illustration only: say a small-batch producer gets a regional grocery order that needs $40,000 of ingredients, jars and shipping. The retailer will pay a few weeks after delivery. The producer has the kitchen capacity but not the cash to buy everything at once, so it buys in small lots at higher unit prices, or turns the order down. Funding the full purchase up front means the order is filled in one run. Whether that is worth the cost depends on the margin on that order, which is the number to work out before you apply.
Many producers start in a shared or commissary kitchen or use a co-packer, then reach a point where renting time no longer makes sense. Moving into your own production space is a large step: lease, ventilation, food-safe surfaces, floor drains, cold storage and the equipment to fill a kitchen. The question to settle first is whether sales are already strong enough to keep the new space busy. A producer with standing orders from several retailers has a stronger case than one hoping a new space will create demand.
Packaging changes are another common trigger. A new label, a different container size or a retailer's request for a specific case format can mean new minimum order quantities, and printers and bottle suppliers usually want payment before delivery.
You can apply for $25,000 to $5,000,000, funded in as little as 24 hours. We consider FICO scores of 500 and up, ask for about three months of business bank statements and do not require tax returns. The application takes about five minutes and uses a soft credit pull. Sole proprietors can apply, which matters for the many food businesses that started as a single owner in a shared kitchen. When you are ready, start the application.
Yes. Sole proprietors can apply, and a shared-kitchen operation is judged on its bank statements. About three months of business bank statements are requested, and tax returns are not required.
Typical uses include bulk ingredients, packaging and labels, equipment, extra labor for a large order and the gap while a wholesale buyer pays. Choose a use that turns back into sales quickly.
Often, yes. You pay for ingredients, packaging and labor before the buyer pays on its terms, so the larger the order, the larger the cash gap in the middle.
Work from the order or purchase you are funding. Add ingredients, packaging, labor and delivery, then see how long until payment. Funding is available from $25,000 to $5,000,000.
The application uses a soft credit pull, so it does not add a hard inquiry.
Three months of business bank statements and a 5-minute application. FICO 500+ considered. $25,000 to $5,000,000, funded in as little as 24 hours.
Apply Now →It takes about two minutes and it will not affect your credit score.
No obligation • No impact to your credit score
