Run Veggie Founder Jermaine Kelly knew invoice factoring would help drive growth. Here’s how and why Jermaine Chose FundThrough as a cash flow partner.
Founded in 2018, Run Veggie sources raw materials and products for private companies and government contractors across Washington D.C., and other cities. Founder Jermaine Kelly started the company in food production and catering while moonlighting in distribution.
Over time, Jermaine began to notice patterns around the city. He started meeting with people who made products across the city and learned some of the challenges they faced in procuring raw ingredients. He catered to restaurants, food producers, beverage makers, and more.
Jermaine saw an opportunity to expand the company’s network. Could Run Veggie be a benefit to a larger clientele of people who needed certain ingredients on demand? And would the government be a potential source of revenue? Jermaine needed to branch out, boost cash flow, and put the Run in Run Veggie.
At the start of the company, he worked with contractors and subcontractors to better understand their needs. Run Veggie quickly found success with government contractors that needed ingredients. This helped the company build the brand in the distribution for food and non-food distribution.
And as America moved into the COVID-era, at the end of the day, people still needed to eat.
There was just one challenge: Cash flow.
The expansion of the clientele to government contractors brought along a new caveat. These contractors had payment terms of 30 or more days. In an industry as competitive and lean as food procurement, cash truly is king.
“I don’t sell anything that I don’t have,” Jermaine said. “Anything that I’m selling, I’m inventorying first. I have to assure the customer that they are going to receive the product when I say they are.”
But the challenge is compounded given that Jermaine wants to give as many customers as possible the best price possible.
“My customers want to have a reliable source to purchase these products from. They want to know that they are getting a good price too instead of going to a local supplier. I try to create a system of group buying where there are several people who are buying the same thing. With government contracts, there is constant budget scrutiny. I can price the products based on what the entire group needs.”
With many clients all holding payment terms of 30 days or more, that created new pressure. As a startup, most companies can’t afford to wait that long for just one client to pay. But Jermaine faced several weeks with many contractors. If another client had a specific need, he required cash on hand to purchase and distribute products right away.
That’s where FundThrough showed its value as a partner to the startup.
FundThrough could provide working capital to Run Veggie in exchange for its outstanding invoices to these contractors and other companies.
“FundThrough helped me manage cash flow for my deals, which was crucial,” Jermain said. “I was able to bring in more deals and buy more product from my suppliers.”
Jermaine had already recognized the value of invoice factoring before expanding the company. Run Veggie would use this financial accounting practice as a way to ensure that it always had cash on demand.
But choosing the right partner was an important decision.
Jermaine said that the firm needed a factoring that wasn’t a Mom and Pop operation, and it was critical that rates weren’t “ridiculously high.”
“I did my search through Google and found FundThrough. The firm looked more like a fintech company, which meant they are a group of people that could think outside the box with factoring.”
Jermaine says that not only were the fees in line with expectations, but that customer service has helped Run Veggie succeed as well.
“FundThrough is really great on communication,” Jermaine says. “We regularly discuss my upcoming deals and I receive great feedback. I feel like customer service is No. 1 at FundThrough– and that is the most important piece to any company.”
The company currently has five employees and is expanding in cities across the United States. Kelly says that any city that provides an opportunity, he will set up a local presence.
“We’ve already expanded into New York and California with a few deals that we have,” he said. “With access to capital, I can set up anywhere that there are people looking to source raw ingredients. We can help them at a local level.”
Jermaine plans to scale up in new cities using the same strategy that made Run Veggie an early success in Washington. And with access to capital when Jermaine needs it, Run Veggie will continue to use buying power to help meet its growing clients’ demands.
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