Finance for food producers, processors and wholesalers

Who this hub is for

This hub covers businesses that make, transform, pack or distribute food to other businesses: bakeries supplying trade customers, meat and dairy processors, ready-meal and sauce producers, contract packers, and food wholesalers moving chilled, frozen or ambient goods. It is deliberately separate from catering and hospitality, where the questions centre on kitchens and front of house, and from retail, where the customer is usually a consumer paying at the till or online.

The common thread is that money tends to get tied up in two places at once. Plant has to be bought, installed and commissioned before it produces anything, and ingredients, packaging and labour are paid for well before business customers settle their invoices. Choosing finance well means matching each cost to a structure that fits how and when it pays back.

Matching the cost to the funding route

Asset finance, which covers hire purchase and leasing, is designed around an identifiable asset. With hire purchase you pay instalments and ownership normally passes after all required payments and any option fee are made. A finance lease lets you use the asset for the term without automatic ownership at the end. Which a lender will consider depends on the equipment, whether it is new or used, how specialised it is and how easily it could be removed and resold.

Business loans can fund costs that are not a single movable asset, such as hiring and training staff, premises alterations or an opening stock of ingredients. Loans may still require security and personal guarantees. Invoice finance releases cash against eligible invoices already issued to suitable business customers, which can help wholesalers and trade suppliers on credit terms, but it does not apply to consumer card sales or to orders you expect but have not yet invoiced.

• Mixers, ovens, cookers and preparation kit: asset finance
• Fillers, sealers, labellers and conveyors: asset finance, often as a line
• Cold rooms, blast chillers and refrigerated bodies: asset finance, case by case
• Staff, premises works and launch costs: business loan
• Issued invoices to trade customers: possibly invoice finance
• Existing owned kit: possibly asset refinance

Compliance stays with the business

Food businesses generally need registration, but establishments handling some products of animal origin may instead need approval, depending on their activities and any exemption. Ask the relevant authority which applies. Guidance differs between the UK nations, with Food Standards Scotland covering Scotland. Lenders may ask about your status, but no finance agreement confirms that equipment, premises or processes are compliant. Check current requirements before committing to kit or a site.