A/R Financing Helps Functional Beverage Company Expand Production and Distributor Sales

The Situation:

A fast-growing functional beverage company based in the Southwest was experiencing increasing demand for its flagship functional seltzer product. The company distributes through its direct-to-consumer website, major online marketplaces, and regional distributors, while production is handled by an established Midwest co-packer.

As sales expanded, the business faced a working capital gap created by production costs and customer payment terms. Larger distributors and retail partners operated on payment terms of up to net 30 days, while the manufacturing process required a 50% deposit at the time of order placement and approximately six weeks for production. This created a timing mismatch between paying for manufacturing and receiving payment from customers, putting pressure on cash flow during a period of rapid growth.

The Solution:

Southstar Capital structured an Accounts Receivable financing facility designed to provide immediate access to capital tied to the company’s outstanding invoices. By advancing funds against receivables, the facility delivers consistent working capital aligned with the company’s sales cycle and production schedule.

This structure enables the company to cover production deposits, maintain inventory flow, and support expanding distributor relationships without relying on equity financing or high-cost short-term debt.

The Result:

With improved access to working capital, the beverage company is positioned to keep pace with growing demand and expand distribution channels. The facility allows the business to fulfill new orders, increase production capacity, and support ongoing brand growth while maintaining ownership and operational flexibility.

With Southstar Capital’s financing in place, the company is well positioned to pursue its projected growth throughout 2026 and continue building its presence in the rapidly expanding functional beverage market.