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.”