Shropshire Business Talk: Helping food and drink firms to be fleet of foot

The latest Lloyds Bank UK Sector Tracker has found that UK food and drink producers saw output grow at the fastest pace of any monitored sector in August, its second month of consecutive growth.

This was driven by a strong rise in new orders, again the fastest of any sector recorded last month, while backlogs of work grew for the first time in more than two years, reflecting strong demand.

All this comes shortly after food distribution giant Harlech announced that it is set to create an additional 150 jobs at a new depot in Telford.

Cited as an area that’s ‘ripe for growth’ and, with more than 850,000 jobs already linked directly to the food chain in the Midlands Engine region – equal to nearly 20 per cent of all employment – the region’s power in this sector is well known.

Of course, as the region’s food and drink sector continues to go from strength to strength, this is a positive outlook that firms will naturally want to lean into. Busier periods, businesses must ensure they have a healthy working capital position and that’s why more firms are considering financial products like invoice finance and asset-based lending tools - to help fuel their growth plans.

Financial products like this are perfect for businesses that need an injection of funds to help them trade more effectively during a peak in demand. They allow businesses to release capital tied up in assets, which can then be invested in their business at busier times.

For food and drink businesses that sell directly to retailers, restaurants and bars, an important practical way to maintain a healthy cashflow is to invoice and collect debts on time. But this isn’t always possible. Invoice finance can help here, as it allows suppliers to release up to 90 per cent of the value of their invoice book, typically within 24 hours so it is a perfect option for wholesalers awaiting payment for a big order.

Meanwhile, for food and drink businesses that need to invest in new products or machinery, asset finance, or hire purchase, as it’s sometimes known, can be an effective way of unlocking growth without impacting the cash flow they need to maintain their day-to-day operations. What’s more, these assets are paid off over their lifetime, rather than by paying cash up-front, with fixed regular payments helping with budgeting.

Helping Shropshire’s food and drink firms to be fleet of foot, so they’re able to invest quickly and install assets that will allow them to pursue growth and serve an expanding customer base is key – now more than ever.