A small, craft alcohol distillery known for its unique spirits was growing in popularity, with demand from restaurants, bars, and liquor stores increasing steadily. However, despite its success, the distillery faced a major cash flow issue due to long payment terms. Many of its buyers took 30 to 60 days to pay their invoices, while the distillery needed immediate cash to cover production costs, purchase raw materials, and manage day-to-day operations.
This was when they discovered Factor & Fund and the benefits of invoice factoring.
The Cash Flow Struggle: Scaling Production Without Immediate Payments
The distillery’s growing orders meant larger production runs, which required significant upfront costs for ingredients, packaging, and labor. The problem? While they were shipping out product regularly, they had to wait up to 60 days to get paid, which left them scrambling to cover operational expenses in the meantime.
They needed a way to bridge the gap between production and payment, without resorting to high-interest loans or incurring more debt.
The Solution: Invoice Factoring for Alcohol Distilleries
Factor & Fund offered the distillery a solution: invoice factoring. Instead of waiting for payments from retailers and distributors, the distillery could receive immediate cash by factoring their outstanding invoices.
Here’s how it worked:
- Invoice Submission: After delivering their product, the distillery submitted their unpaid invoices to Factor & Fund.
- Quick Cash Advance: Within 48 hours, Factor & Fund advanced 90% of the value of the invoices, providing the distillery with the working capital they needed for production and expansion.
- Final Payment: When the distillery’s clients eventually paid the invoices (30-60 days later), Factor & Fund sent the remaining balance to the distillery, minus a small factoring fee.
The Results: Cash Flow Stability and Business Expansion
The small alcohol distillery was able to achieve financial stability and even grow its operations, thanks to the cash flow provided by invoice factoring.
- Immediate Liquidity: The distillery no longer had to wait for 60-day payments. They received cash within days, allowing them to continue production without interruption.
- Debt-Free Financing: Instead of taking out loans, the distillery used factoring to access funds without adding debt to their balance sheet.
- Business Growth: With reliable cash flow, the distillery was able to purchase new equipment, increase production, and meet the rising demand for their spirits.
Client Testimonial
“Invoice factoring through Factor & Fund has been a lifeline for our business. We can now cover our production costs without worrying about when our clients will pay. This has allowed us to focus on growing our brand and expanding into new markets.”
– Owner, Craft Alcohol Distillery
Why Factor & Fund for Small Distilleries?
- Fast Approvals: Get up to 95% of your invoice value in just 48 hours, ensuring you have the cash to cover production and operating costs.
- No New Debt: With factoring, you get the cash you need without taking on additional loans or incurring long-term debt.
- Industry Knowledge: Factor & Fund understands the unique cash flow needs of small distilleries and provides financing tailored to the alcohol industry.
If you’re a small alcohol distillery facing cash flow challenges, don’t wait for delayed payments to hold your business back. Factor & Fund can provide the cash flow solution you need to grow. Contact us today or visit factorandfund.com to learn more about how we can help.