The latest client wholesales products in a very competitive and sometimes trend based health and beauty sector. The customers are either a grocery giant or specialised chain store who have the ability to pay invoices and also have very low credit risk rating. The issue of getting paid quickly for our client (the wholesaler) was holding back the business expansion. The business needed cash. It’s a long and patient waiting game for a wholesaler operating in the retail sector. Thus, having the cash flow to grow the business was the biggest challenge facing this business owner.
The industry: Wholesale Health & Beauty
Most clients operate in a niche area within an industry, in this case the health and beauty industry and our latest client is a wholesaler of men’s and women’s shaving products
What is happening:
This client has been operating for 20 years and has always used a mix of finance options for the business including shareholder loans, factoring and equity funding.
When you are selling to the retail giants and the specialised health and beauty sector you need lots of stock, good management, strong margins, sometime good luck and definitely cashflow. Terms are generally 30- 60 days EOM so getting paid quickly is not an option. The client also had to deal with discounts and rebates which standard terms set by the retailers. It’s a tough industry to be a wholesaler so the client needed a financier that was flexible about such discounts and rebates as well as the 60 day terms.