An Exeter-based speciality food supplier has secured a funding package to help it gear up for an expected rise in demand for local produce during the summer tourist season.
Established in 1997 by husband and wife team, Orchardlea Foods supplies West Country cheeses, cooked hams meats and handmade pies and pasties to village shops, delicatessens, pubs, caterers and small supermarkets across the region.
The business expects to see demand for its products soar this summer, as many predict that the fall in the value of sterling will see a huge number of British holidaymakers choose UK destinations such as Devon, instead of travelling abroad.
To support the growth plans, management approached their banking partner of more than a decade, Lloyds TSB Commercial, who identified asset based lending (ABL) as the best way to meet the company’s funding needs.
The bank’s specialist ABL division, Lloyds TSB Commercial Finance, put in place a factoring facility which makes an immediate advance against the value of Orchardlea Foods’ invoices, therefore providing the working capital required to purchase new processing equipment and extend its product line.
Elaine Proudman, partner at Orchardlea Foods, said:
“The funding package will enable us to invest now to ensure we are ready to make the most of the opportunities we’re likely to see in the summer months.We already have a great working relationship with the team at Lloyds TSB Commercial Finance who have always helped us out with extra funding when we’ve needed it, most notably during the foot and mouth crisis in 2001.The factoring facility suits our needs perfectly as it strengthens our cash flow, provides new working capital and gives us the flexibility to move the business forward.”
Roger Edwards, regional manager at Lloyds TSB Commercial Finance, commented:
“With many British holidaymakers predicted to head to the West Country for their summer break this year, there will be significant opportunities for Orchardlea Foods to capitalise on demand for fresh, locally-sourced produce.The facilities we’ve put in place are flexible and tailored to the exact requirements of the company, which make them well suited to firms that experience seasonal peaks in sales.By bridging the gap between the supply of the product and the payment of the invoice, we ensure the business can quickly access cash to invest further in its development.”
Mike Turner, relationship manager for Lloyds TSB Commercial, added:
“We have always worked closely with Orchardlea Foods to understand the business and, in this instance, ABL was the ideal solution to unlock the value of the business’ sales ledger in order to capitalise on new opportunities.”
March 2009