When retail orders create pressure instead of progress
Every product business hits this point. Orders are coming in. Customers are real. The numbers look like growth, but cash flow starts becoming a real constraint.
This FMCG business was two years in. New product in a traditional category finally getting real traction with large retail outlets. The kind that makes it look like you’ve broken through.
What it actually meant was needing to pay for stock upfront. Wait to get paid later, while needing to cover wages, raw materials and ongoing marketing to get more orders. Repeat before the first cash comes back.
When you're small, initial capital requirements can be met by personal borrowing and overdrafts. Scaling up needs funding that can keep up with orders, not just ideas.
At the same time, they were preparing to launch new product lines. Higher margin. Stronger position in market. The kind of move that should accelerate the business.
Instead, it tightened everything.
Cash was tied up in unpaid invoices (receivables). Suppliers wanted paying upfront. Growth was widening the gap.
They looked at raising more capital. It would take time. It would come with dilution. And it still wouldn’t solve the day-to-day timing problem.
So they leaned on a small overdraft. It helped, briefly, but didn’t keep up with their working capital needs. It rarely does for growing companies.
An existing shareholder pointed them to Lock Finance.
For Lock Finance, the situation wasn’t complicated. The business was selling. The margins were there. The pressure was coming from timing. Cash sitting in invoices. Stock needing to be paid for before those invoices cleared. A familiar problem with a simple solution that requires understanding working capital dynamics.
Two changes shifted it.
Instead of waiting 30 to 60 days, invoices turned into cash almost immediately. The overdraft was cleared. Selling and getting paid were no longer separated by a gap that kept widening.
Stock stopped being a judgement call. With funding against confirmed retail orders, they could produce knowing the cash would follow. Not hoping it would.
No new equity. No restructure. Just funding that matched how the business actually worked.
The change wasn’t dramatic from the outside.
Inside, it was the difference between constantly managing shortfalls and simply getting on with the job.
That’s the part that catches most FMCG businesses out. Getting ranged feels like the win. In reality, it’s where the pressure starts.
Because the faster you grow, the more cash you have to spend before you see it. If that gap isn’t funded properly, growth doesn’t slow down. It stops.
