From production to expansion: How working capital finance supports a growing bakery manufacturer

For an established Australian bakery and food manufacturer, business growth means more than increasing orders. It requires working capital to purchase ingredients, maintain production, pay suppliers and invest in future opportunities.

With an established manufacturing operation and new expansion opportunities, the business needed a finance structure capable of addressing different funding requirements.

Rather than relying on a single business loan, the opportunity was to bring together complementary facilities to support cash flow, supplier payments and longer-term investment.

Recognising the client needed a flexible, tailored solution, the Connective finance broker then engaged Octet, who structured a combined finance package totalling $8.875 million, comprising an $8 million debtor finance facility, $150,000 trade finance facility and $725,000 term loan.

Each facility addresses a different funding requirement, creating a more flexible approach to managing business finance.

The $8 million OctetDebtor finance facility provides access to funding against eligible outstanding customer invoices.

Rather than waiting for wholesale customers to pay, the business can access working capital earlier to support ongoing operations and reduce the cash flow gap between production expenses and incoming revenue.

For a manufacturer managing existing customer orders while pursuing new markets, access to cash tied up in receivables can provide greater flexibility to manage its trading cycle.

The $150,000 OctetTrade finance facility provides additional flexibility to fund eligible supplier purchases.

By paying suppliers upfront while allowing the business more time to repay, trade finance can help preserve available cash for other operating requirements, including production and distribution.

This flexibility can be particularly valuable when increasing production volumes, introducing new product ranges or managing changing demand.

The $725,000 term loan provides funding for longer-term business requirements.

Depending on its agreed purpose, this type of finance can support investment in manufacturing equipment, operational improvements or business expansion without relying entirely on cash generated through daily trading.

“What makes this structure valuable is that each facility has a clear purpose,” notes the Connective finance broker. “Together, they provide a more comprehensive funding solution than relying on a single traditional business loan.”

With three complementary finance facilities in place, the manufacturer has access to a funding structure designed to support its immediate working capital requirements while providing capacity for future growth.

In the short term, debtor finance can improve access to cash from customer receivables, while trade finance helps manage supplier payments and preserve liquidity.

Looking ahead, the combined finance solution provides a financial structure capable of supporting the manufacturer's broader growth ambitions following its recent acquisition.

With opportunities to extend national distribution, develop new product ranges and reach more customers across retail and foodservice markets, access to flexible working capital can help the business balance expansion plans with the ongoing financial demands of manufacturing.

The term loan also provides capacity for eligible longer-term investments, complementing the day-to-day cash flow support available through debtor and trade finance.

“Having different funding options available gives us greater flexibility to plan ahead,” reflects the company director. “It's about supporting the business we're operating today while having the capacity to pursue opportunities for tomorrow.”

For Australian manufacturers and their brokers, this case illustrates how combining debtor finance, trade finance and a term loan can provide a flexible alternative to traditional business finance.

“Good working capital finance should support a business through its normal trading cycle while providing room to grow,” emphasises Tony. “Our role is to work with brokers and their clients to structure funding that suits their commercial requirements.”

Whether you're looking to expand your operations, invest in another business or improve day-to-day cash flow, a tailored combination of debtor finance, trade finance and term loan funding could provide the financial flexibility to support your plans.

Talk to an Octet working capital specialist, or your commercial finance broker, about a finance solution designed around your business.

If you're a broker interested in partnering with Octet to explore cash flow solutions for your clients can read more about our flexible working capital facilities.

Connective brokers who have a client caught in the cash flow gap or looking to grow, book a meeting with your Connective Lending Manager or Connective Cashflow BDM, who can help structure the right cash flow solution.