Last Updated on April 28, 2021 by Grey Idol
Food and beverage companies are no strangers to cash flow issues. Distributors, caterers, manufacturers and resellers all face one common problem: waiting on unpaid invoices. With long payment terms of 30-90 days, while trying to keep up with overhead and payroll expenses, food and beverage companies can easily get stuck, forcing them to turn to alternative financing options.
One of the best solutions for the food and beverage industry is invoice factoring. altLINE and The Southern Bank have been helping customers improve cash flow since 1936. Because we’re a bank, not an independent factoring company like most others, we cut out the middle man. Our factoring services are more trusted, more affordable and all backed by the FDIC. We have experience working with food and beverage companies, and we’re prepared to provide affordable and reliable cash flow financing to help you grow.
What is Factoring for Food and Beverage?
Invoice factoring is a unique financing tool for many industries, but particularly food and beverage. Factoring is the process of selling your receivables to a factoring company (also known as a “factor”) in exchange for cash up front. The factor typically advances between 80-90% of the total invoice value. Once the invoice is paid by your customer, the factor will release the remainder to your business, minus a small factoring fee (typically 1-5%).
Why Factoring Works Well for the Food and Beverage Industry
Food and beverage companies of all kinds struggle with keeping cash in the bank, relying on that next invoice to come through in order to keep growing. Without sufficient cash flow, the business may struggle to keep its doors open and its expenses paid.
On top of that, oil and gas companies deal with long payment terms, seasonal demands, and frequent payroll deadlines. Invoice factoring allows food and beverage companies to extract the cash value out of their unpaid invoices, immediately giving them access to capital that they’d usually wait 30-90 days to see. This dramatically shortens the payment cycle.
What makes food and beverage factoring different from traditional bank financing?
Unlike a traditional bank loan, invoice factoring for food and beverage companies is not a loan at all. Its the sale of an asset (your outstanding invoices) in exchange for cash. That means it will not count against your credit rating. The minimum requirements are more accessible for this type of financing, allowing businesses with limited operating history, lower credit scores or few assets to borrow against.
What are the benefits of factoring with altLINE?
We’re top-ranked by Investopedia, TheBalanceSMB, Business.com, Fundera and Merchant Maverick. Why do they rank us so well?
Our services are competitive:
- Rates from 0.50%
- Advances up to 90%
- No Application Fee
- No Hidden Fees (Ever)
- Fast Approval
- Local Customer Service
Our track record is strong:
- In Business Since 1936
- Over $600 Million in Funded Invoices
- We’re a trusted community bank
Want to find out if factoring is a good fit for your food and beverage company?
If your business is short on cash, but have lots of outstanding invoices, you might be a fit. To get a free quote, apply here or call (205) 607-0811 to speak with a sales representative today. We look forward to helping you grow.