S/C Financing – Produce Distributor

Nature of Business

Distributors within the highly competitive fresh produce industry in the U.S. face challenges for freshness, product safety, rising transportation costs and thin margins.  Efficient operations, especially relating to the supply chain, are required to sustain profit levels sufficient to capture growth opportunities. With the consumer trend towards healthier eating pointing to an increase in produce sales, a U.S.-based produce distributor, buying from Latin American suppliers, was looking to grow its purchasing volumes.

Challenge

Despite receiving short credit terms from select suppliers in Latin America, the produce distribution company had difficulty finding the cash flow reserves that would enable him to increase his buying volumes, and ultimately his purchasing power—and profit margins.

Solution

ExpoCredit approved a $600,000 credit facility for the distributor targeted to paying supplier invoices. With the money to pay suppliers provided by ExpoCredit’s credit facility, the distributor was able to get money to his suppliers quicker, reducing the payment cycle from Net 30 to Net 10. This resulted in a significant prompt payment discount from suppliers, giving the distributor a further boost in profitability and growth capacity.  On the other hand, ExpoCredit offered payment terms for the credit facility of Net 60, creating even more of a strong position.

Benefit

By increasing overall buying capacity through the credit facility provided by ExpoCredit, the U.S. produce distributor was in a position to negotiate more favorable pricing from suppliers—and get them. The distributor was able to grow his business more quickly. The suppliers enjoyed greater sales and faster payments. The ExpoCredit credit facility proved to deliver a win-win for everyone.

Case Studies

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