Castlefield Cosmetics aiming to clean up with new funding partner
Steve Richardson of Castlefield Cosmetics explains how Advantedge have given them the confidence they need.
Every business is faced with its individual challenges, but, with the right funding partner, a challenge is by no means a barrier to success. Castlefield Cosmetics are confident that the next three years will bring growth thanks to their close relationship with Advantedge Commercial Finance.
Following a disastrous flood which caused a previous business to close, the directors acted quickly to purchase the assets of a similar firm in the cosmetic and toiletry industry in order to form Castlefield Cosmetics in December 2017. The firm specialise in the contract manufacture of cosmetic and toiletry products from traditional shaving foams, haircare products, bathing products to a range of male grooming and female cosmetic products.
Based in the heart of Yorkshire, their experience includes the design, development and production of cosmetics for a range of clients to support their requirements, whether they are starting a new range or adding to an existing one. They manufacture, fill and pack goods inhouse ensuring the flexibility their client requires.
The industry has inherent issues with lengthy cashflow cycles due to the nature of the manufacturing sector. Once an order is received, raw materials are purchased upfront from suppliers, the product is manufactured and packaged before being despatched to clients. Add to this the lengthy credit periods which clients expect, and it isn’t difficult to understand the level of working capital required and the strain on cashflow that success will bring.
Having formed the business, the management team knew that they needed access to working capital immediately to support the upfront purchase of raw materials from their suppliers and overhead costs including staff wages. With a lack of interest from the banks they opted for invoice finance as previous experience had taught them that it was the most suitable funding solution for their sector.
As Steve Richardson, managing director, explained: “Having used invoice finance in the past, I knew the benefits that it would deliver to the business. However, having worked with larger funders, I knew the pitfalls and was looking for a smaller supplier to work with. We wanted to find a small independent financier who we could build a strong working relationship with. Having looked at a few, we chose Advantedge because they ticked all the boxes for us. We were really impressed that the MD came to visit us – at start up - to get to know our business and how it works. In fact, the whole team has visited us in their effort to get to know and really understand how our business works!”
Advantedge structured a £250k Invoice Finance facility, which allows the business to release cash from invoices, bridging the gap between paying suppliers and receiving payment from clients.
With turnover projected to hit £1.1m in their first 12 months, Steve agrees that the right funding partner makes a difference: “Securing access to medium/long-term working capital with invoice finance was something we saw as key to supporting our development as we set up the business and carried out our growth plans. Having the right funding partner pays off. When we have an issue, a quick telephone call to one of the team suffices. They understand our business and how it works, and their team are empowered to make quick decisions. There is no extended decision-making or running off to head office for decisions. It really does give you comfort that they are on your side – I really can sleep better knowing they are working with us to help our business grow”.
Darren Cottenden, Managing Director, North at Advantedgesaid: “When we first met Steve and the team, it was clear that they had a great business and being able to support them on their growth journey is important to us. We have worked closely with the management team and really understand the business and its individual pressure points. Their Invoice Finance facility provides fast and flexible funding to maintain a healthy cashflow and we are thrilled to see it being put to good us in order to grow their business”.
As Steve concludes: “We are ambitious and have great plans for the business and we really are confident that we can grow with Advantedges’ support. They are a fantastic partner to help us facilitate our growth and we are delighted that they are our long-term funding partner”.