Mark Bishop, Joint MD, Interfood, told FoodProductionDaily a recurring theme at FoodEx, Birmingham, NEC, UK, was the interest shown by visitors in dedicated finance options given the ongoing difficulties faced in sourcing finance from banks.
'Clear drag on growth'
“This is particularly true of SMEs (small to medium sized) businesses with reports citing access to external finance still represents a clear drag on growth,” he said.
“Finding access to competitive funding remains an issue in commerce generally and the food processing industry is no exception.”
Interfood has seven company divisions and demonstrated its latest processing equipment at FoodEx; its 906 Slicer from Weber and the GMS 500 single cut fresh meat portioner from TVI.
It works with a number of equipment and ingredient manufacturers, including Weber (slicers), Poly-clip (clippers), TVI (fresh meat portioning), K&G Wetter (bowl cutters), Maurer Atmos (smokers & cookers).
It recently partnered with FSP Finance to offer packages tailored to the food processing industry.
Bishop said they offer hire purchase, finance leasing and operating lease finance and the latter is becoming an increasingly popular funding option, with benefits in terms of cashflow, as the equipment is shown in a company’s profit and loss account rather than as an asset, with monthly fixed payments and the opportunity for outright purchase at the end of the agreement.
FSP finance was set up in 2011 by two brothers Andrew and Graeme Ferguson who have been in finance for over 15 years and Tim Shears who has been in the food business at director level for over 20 years becoming the Ferguson Shears Partnership (FSP)
With Shears background and experience in food production at companies like Northern Foods, Whitworths and latterly Vion Foods their focus was on assets within the food, drink and distribution sectors.
“By dealing with somebody who understands the nature of the food processing industry and the specific challenges it represents, a financing package can be created which fits the particular needs of the business rather than just taking an ‘off-the-shelf’ product which is simply there to cater for anybody looking for finance, irrespective of what they do,” added Bishop.
“Having worked himself in food processing, Tim speaks the same language as the customers, understanding what they mean when they talk about things like yield, line speeds and working with us on the technical specifications and performance of the machines, we can show the customer the ROI (return on investment) they can expect.”
Smoke meat products
As an example he said one customer was looking for his bank to fund a £200k purchase of an oven to cook and smoke meat products.
After four months deliberation and positive feedback it bought the equipment expecting their bank to support the purchase. With a cash flow deadline fast approaching they looked to FSP as a backup and it managed to get an approval using an asset finance instrument of sale and leaseback with the customer being paid back within two weeks of meeting them.
“Most people in business believe it is profit that makes a good business. Of course that is important but financial directors understand cash flow is vital to driving a successful business,” said Bishop.
“FSP works with its customers to protect cash flow from spikes caused by capital investment. Whether it’s providing finance that includes funding of hefty deposits for major machinery and staged payments, funding non-profit generating projects such as office re-fit, IT or Telecom or providing cash loans.”