Consumer Packaged Goods (CPG) Financing

Navigating the world of consumer packaged goods (CPG) is easier with the right team by your side. There’s a lot of moving parts within the CPG sector, from seasonal dips to evolving consumer demands, many of which can leave a lasting impact on your financial health. Porter Capital is a dedicated CPG financing provider with over 30 years of experience, ready to eliminate cash flow gaps and propel your business toward success.

Consumer packaged goods financing is a viable strategy allowing companies to get their hands on necessary funding to carry out daily project tasks. CPG is one of the largest sectors in the United States and is projected to only keep growing. Regardless of size, CPG companies are subject to a highly saturated and volatile marketplace. Their challenges come in all shapes and sizes, including shifting consumer preferences, supply chain difficulties and ruthless competition.

Operating in unique capital cycles and purchasing inventory months before it sells with unknown outside influences can make it difficult for organizations to acquire financing from a traditional bank. Instead, CPG companies can work with alternative financing providers to successfully grow and expand their business. This course of action allows businesses to acquire reliable and flexible funding options to manage cash flow better and adapt to evolving market characteristics.

CPG financing consists of various solutions and strategies to support companies in their endeavor toward a successful operation. There isn’t a one-size-fits-all answer when it comes to financing, requiring dedicated effort and research to identify the right solution for your needs. Here are some of the most common types of alternative financing options for CPG companies:

Invoice Factoring

Working capital is crucial to any operation, ensuring the business has enough money to cover materials, expenses, debts and more. Securing this money can be a challenge for many companies, as there’s often a delay of 30, 60 or 90 days between selling their products and services and receiving payment. Work with an invoice factoring provider to strengthen your CPG operations, eliminating this lag time and allowing you to sell your invoices and receive a cash advance upfront.

After delivering agreed-upon products or services to your customers, you’ll provide your factoring partner with the invoice for your products. They’ll then pay the amount owed by your client, which is often up to 90% of the contract, minus a fee for services. With this money in hand, your business will be free to use it how you see fit to address your cash flow and quickly respond to various industry-specific events.

Purchase Order Financing

When you receive a purchase order (PO), it’s your responsibility to fulfill the order and ensure your customers receive the correct products on time. This fulfillment requires an investment of money to acquire or manufacture the goods. Businesses that don’t have the capital on hand can turn to a PO financing provider to obtain a cash advance to cover up to 100% of the purchase order. After fulfilling the order, you’ll inform your customer to pay your PO partner directly, and then your partner will send you the payment minus their fee.

PO financing is a great option for smaller CPG companies receiving more orders than they have the capital to fill. This solution is a rapid strategy to keep your operations moving forward without sacrificing ownership, which is common in other financing methods such as angel investing. You’ll have the funds you need within a few days and won’t have to worry about repaying your lender, as the customer takes care of payment.

Asset-Based Lending

Asset-based lending is another CPG financing option enabling businesses to acquire valuable funding to strengthen their ability to expand their services despite delayed payments. This strategy is a type of loan or line of credit agreement secured by collateral. The collateral connected to the deal can take form in various ways, most commonly as equipment, accounts receivable, inventory or any other asset with equal value.

Distributors and manufacturers often take advantage of this offering during periods of high production and low cash flow. The CPG sector can be unpredictable and fluctuate according to seasons. This lending allows organizations to be confident in their future operations during any time of year, knowing they have access to the cash required to cover payroll and continue to facilitate meaningful growth.

Porter Capital is a nationwide financing organization committed to delivering expert funding services to small and medium CPG businesses. Our team offers decades of industry expertise to develop meaningful solutions that help drive growth while optimizing operational efficiency. We’ve worked with countless clients over the years, giving us the know-how to confidently address needs specific to various industries, including transportation, oil and gas, distribution, manufacturing and many more.

Thanks to our vast experience, Porter is the ideal team to provide funding for your workflow within the CPG sector. You’ll experience the following advantages with our team by your side:

Getting started with CPG financing at Porter Capital is quick and easy. We’ve developed a streamlined application process to help you acquire the funding you need as soon as possible, so you can return your focus to the areas of your business that truly matter. Since your time is extremely valuable, our service boasts short wait times and an online paperwork submission system. Most of our applicants are approved within 24 hours, regardless of credit score, collateral or length of your CPG operations.

Once we receive all the paperwork with basic information about your company, we’ll get the CPG financing process started. Here’s an overview at what it will look like:

1. Sell your goods or services to a creditworthy business.
2. Submit your invoice to our team for approval.
3. Receive up to 95% of your invoice amount from Porter.
4. Accept the remaining balance, minus a fee, once our team receives payment from your customer.

CPG financing is an effective strategy to acquire stable funding to support your daily workflow through periods of high production and low cash flow. At Porter Capital, we’re proud to partner with businesses of all shapes and sizes, ensuring they have the expert support they deserve.

Learn more about our financing options for consumer packaged goods providers when you contact our team online today!