Independent Growth Finance (IGF), a UK asset-based lender, has provided £750,000 of funding to sausage manufacturer Porky Whites after the premium brand was let down by its bank, IGF said.
Porky Whites, a family-owned manufacturer of sausages, burgers and meatballs to retail, wholesale and foodservice providers, was on the brink of collapse in November 2019.
“A combination of external factors pushing up production prices and a pricing gap in one of its retail contracts had left Porky Whites facing administration.
“The management team hurried to find a way to fund a buyout and keep the family’s legacy alive,” IGF said in a press release.
“After the company and assets were bought out by the managing partners, the company name had to be changed. This proved challenging, with 60% of their stockists requiring them to start again as new suppliers.
“With some large supermarkets, this took up to three months to be processed and therefore for Porky Whites to be paid,” IGF said.
Having the funding facility in place meant that the business could run on pro forma invoices with companies to rebuild trust. This allowed Porky Whites to set expectations with customers without needing to ask for payment until after delivery of the goods.
IGF was able to further extend the initial facility to allow the business to weather the storm, the statement said.
After dipping 34% below forecast in February due to cash flow issues, by March the business was operating at 19% above forecast, with payments finally coming through.
The facility continued to serve Porky Whites, but as cash flow improved the business was able to use just a portion of the facility, according to IGF.
Jeff Greenfield, ABL director at IGF, said: “We were pleased to be able to able to help Porky Whites through a tough time, turning the deal around in a week after another provider was unable to fulfil its original offer.”
“The confidence IGF has in business and the flexibility within the confidential invoice discounting facility has allowed Porky Whites to grow from strength to strength.”
During the lockdown, retail sausage sales spiked and Porky Whites saw a 30% uplift on retail sales. It was able to grow its online store to deliver direct to more consumers than ever before.
The supplier was given three-day payment terms from two of the biggest supermarkets to ensure there was no disruption to the food supply. Trade back to butchers also increased, seeing Porky Whites receive more orders from the catering market.
“Throughout this, the business had access to the facility to draw down on as needed.
“This gave Porky Whites the ability to reinvest VAT returns into machinery and marketing and to plan more effective purchasing through bulk buying and longer contracts.
“By the end of June, Porky Whites was operating 37% above forecast and looking to the future,” the statement said.
Porky Whites, is now in a stable position with its cash flow, has gone on to hire additional staff and secure funding from a third party to invest in machinery.
The company is working with a Department for International Trade adviser on export opportunities in the United Arab Emirates and has secured a growth management grant.
“The world is changing and in response to that Porky Whites is adapting. Looking at how to adapt to consumer needs and working closely with the catering industry is bringing new unique product lines to market,” Wyatt said.
Independent Growth Finance (IGF) is a private equity-backed business with a head office in Redhill and offices in London, Birmingham, and Manchester.
IGF is also a British Busines Bank-accredited provider of CBILS.