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Supplier Finance


Supplier  finance (not to be confused with supply chain  finance*) is a catch-all term for the various ways suppliers to food and drink businesses can assist with the capital to invest in a business. This can be to help cash flow/working capital to make and sell products, or to fund the purchase of medium/long term machinery or equipment.


Capital equipment suppliers will often offer their own finance on the products they supply. This is, in effect, the supplier acting as a credit broker and using either a bank or their own capital to finance the equipment they would like you to buy. To ease the cost, these deals are often at very low interest rates, or sometimes even interest free.


Some equipment suppliers can offer further support when it comes to financing new equipment. For example, they might:


• Pay for the installation (air, steam, electric, connection)


• Offer a credit note for the first year, with the second year on a reduced rate

• Allow for the capital repayments to be absorbed into consumables such as the packaging material, which makes the capital cost a direct/variable cost

• Be willing to negotiate on other terms and conditions


By negotiating for supplier finance packages, along with working capital finance e.g. trade credit, you can significantly improve cash flow within your business, and ease pressure, releasing cash for productive activity such as new product development etc.


*Supply chain finance is where retailers with strong financial backing can arrange for a 3rd party bank or invoice finance provider to allow the supplier of goods to draw the majority of payments due, effectively on cash terms.

If you would like to talk to one of our Regional Cluster Managers, get in touch here.


This document is intended to be an aide-mémoire to help you consider different forms of finance and which ones might be appropriate for your business; it is not a comprehensive guide to all forms of finance. There could be different tax and legal implications associated with different forms of finance. Professional tax and legal advice should be sought to prepare for these different forms of finance.

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