Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
What invoice financing or discounting services do members recommend for drinks businesses?
Several invoice financing providers are actively used and recommended by members in the drinks industry. - **Close Brothers** — Known for strong industry expertise in drinks. Rigorous due diligence process, but highly regarded. Offers bad debt cover. Members have made introductions available. - **HYDR** — Charges 5% and pays same day the invoice is raised. Integrates with Xero and banking systems. Proactive in chasing buyer approval and follow-up. Members report no issues and recommend. - **Novuna** — Used by members; recommended for invoice financing. - **Growth Lending** — Mentioned as an option for invoice financing in the drinks space. - **Time Finance** — Recommended by members who can provide introductions. Members specifically noted they wanted providers that **understand the drinks industry** rather than generic lenders. Close Brothers' strong bad debt cover was highlighted as valuable. HYDR's same-day payment and proactive buyer-chasing were cited as practical advantages.
What payment term delays should drinks founders expect from major distributors and retailers?
Major UK distributors and retailers frequently pay significantly beyond stated terms, creating serious cash flow strain for producers. **Key challenges members reported:** - **Enotria** — invoices 100+ days overdue; stopped responding to chasers - **Luxury retailers** — taking 3+ months to pay; chasing required throughout - **Ocado** — consistently slow payment - **E&C (Edrington & Co)** — historically took well over 90 days; recently received cash injection to clear debts, so payment may improve but members advised to "trade cautiously" during their recovery period **What members noted:** This is a recurring issue that "crops up every 3 months" and appears cyclical. Large distributors seem unconcerned about reputation damage from late payment. Members should budget for extended payment cycles (120+ days) even when terms state 30 or 60 days, and be prepared for extended chasing. Recent capital injections to some distributors may ease terms, but the pattern suggests ongoing caution is warranted.
Which invoice financing providers offer competitive terms and good service for growing drinks businesses?
Members recommend several invoice financing firms with proven track records in the sector. The key is to actively compare fees, as rates vary significantly. **Recommended providers:** - **Gapcap** — praised as "pretty good" by members who've worked with them - **AcceleratedPayments** — reported to work well - **Lloyds** — described as working "very well" - **Close Brothers** — noted as "excellent" by recent users; ask for Péter Hook (ex-Aldermore), described as a "really nice guy" - **Credit Agricole** — members found this option ~50% cheaper than Aldermore in recent fee analysis - **Aldermore** — members have used this for 18+ months but flag that recent fee analysis showed significantly higher costs than competitors; one member also reported they attempted to include a personal guarantee in the contract without explicit discussion or consent, which they had to challenge **Key caveats:** - Do your own fee comparison before committing—rates differ substantially between providers - Close Brothers was noted as "quite old school," which may or may not suit your preference - At least one member raised concerns about Aldermore's contracting practices; review terms carefully - Request fee comparisons upfront when vetting providers For specialist support, members mentioned **Trent Peek** (01623 259 580, trent@wearefulfilment.co.uk) as a recommended contact, though the context suggests he may provide broader supply-chain support rather than financing specifically.
What late payment terms and fees should we include in invoices?
Late payment clauses are common practice but enforcement can be tricky. Members suggest: - **Bank of England base rate + 5%** — cited as a standard approach in T&Cs, though members note enforcement can be difficult in practice. - Legal precedent around 'penalty fees' vs 'reasonable costs' — the distinction matters, so some members recommend getting specific advice before setting terms. Members flagged that late payment clauses "can be quite delicate" and suggested seeking tailored guidance rather than applying a blanket approach. If you want specific tips on structuring terms, reach out to members who've dealt with enforcement.
What are the key considerations when evaluating e-commerce revenue-based financing versus traditional invoice financing for drinks brands?
Revenue-based financing (RBF) can work for e-commerce sales, but members' experience suggests it's only worthwhile under specific conditions. The headline APR rates (3–4%) are misleading because repayment is fast; the effective cost is much higher once you account for the quick payback schedule. **When RBF makes sense:** - Only viable if D2C/e-commerce represents 25% or more of your sales and you're actively cash-strapped - Works best when traditional cash flow is tight and you need immediate liquidity **When traditional invoice financing is better:** - If D2C is a smaller portion of revenue (e.g. 5%), invoice financing on larger B2B orders is more cost-effective - Particularly attractive if your B2B customers (grocers, etc.) have long payment terms (e.g. 90 days); the financing cost is justified by the extended payback period - Offers better economics on larger invoice values **Key caveat:** The quoted APR on RBF deals is not directly comparable to traditional financing APR because of the compressed repayment timeframe. Crunch the actual numbers on repayment speed and total cost before committing.
What are the most effective strategies for managing invoice payment delays and reducing credit control workload?
Members recommend a combination of automation, credit policy enforcement, and outsourcing to reduce the time spent on invoice chasing. **Automation and systems:** - Set up auto-generated statements and auto-email reminders for customers on credit terms — this reduces manual follow-up significantly - Use an online red letter service as an escalation tool if customers don't respond to automated reminders **Credit policy enforcement:** - Implement a **three-strike rule**: remove credit from customers who delay payment three times - Require all new customers to be on **proforma terms for the first 3 months** before granting credit - Use a **trade store or similar platform** for smaller customers who pay immediately at point of order, bypassing credit entirely **Outsourcing:** - Members report outsourcing invoice chasing to their **external bookkeeper** has significantly reduced overdue amounts - **Offshore Virtual Assistants** are cited as a cost-effective option for handling routine admin, bookkeeping, and payment follow-up tasks **Caveat:** Members noted that managing payment delays from larger retail chains is particularly challenging, especially where the risk of losing listings makes aggressive credit removal difficult. For these accounts, the combination of clear proforma terms upfront and automated reminders appears to be the safest approach.
What financing options are available to drinks companies in the post-COVID period?
Members have identified several post-COVID financing routes worth exploring: - **Recovery Loan Scheme** — Available through high-street banks. Starling is lending at 5% APR over 5 years with facilities up to £100k. Worth enquiring directly with your bank about eligibility. - **Growth Lending selective invoice financing** — Operates at 22.5% APR across your entire invoice book. For a 30-day invoice, the charge is 1.5%. They pay 80% upfront with the remainder settled when they recover the debt, minus interest. Useful for smoothing selective cash-flow gaps. Members recommend requesting an introduction via DM if interested. **Caveats:** Invoice financing costs are material (1.5% per 30 days), so best suited to specific cash-flow pinch points rather than routine working capital. The Recovery Loan Scheme terms may vary by bank and personal/business circumstances.
What invoice financing providers are recommended for managing cash flow with large wholesale orders?
Members who've tackled cash-flow challenges with large wholesale orders have used dedicated invoice financing providers to unlock capital tied up in receivables. - **Close Brothers** — used successfully by members to improve cash flow and manage credit control. Their credit control function was noted as particularly helpful for dealing with slow-paying customers.
What are the pros and cons of invoice discounting and other cash flow finance solutions for drinks businesses?
Invoice discounting can help with short-term cash flow, but members advise caution: it's easy to become dependent on it and difficult to stop using unless your business has exceptional growth and high gross profit margins. If you proceed, be aware you'll be sacrificing margin as a cost. Members recommend exploring alternative cash flow solutions before committing to invoice discounting: - **Aldermore Bank** — specialises in supporting drinks businesses, though the setup process involves extensive due diligence and audits, which can be lengthy and demanding. The key caveat from the community: unless your growth trajectory and margins are very strong, invoice discounting typically becomes a trap rather than a solution—you end up paying ongoing costs to solve structural cash flow problems rather than addressing the underlying issues.
Is it standard practice for invoice finance providers to charge factoring fees on credit notes, and should members be paying multiple fees on related invoices?
No — charging factoring fees on credit notes is not standard practice and members should push back on this. One member reported being charged 1.6% factoring fees on three separate items: the original invoice, a credit note cancelling it, and a replacement invoice for redelivered goods after a recall. This resulted in an effective fee of 5% — well above the typical single charge. When questioned in the community, the response was direct: this practice is not normal. Members should clarify with their invoice finance provider whether fees should only apply to invoices actually advancing funds, not to administrative credit notes. If your provider is charging multiple fees on related transactions, it may be worth negotiating the terms or exploring alternative providers.