At Kaizen Consulting, we supported a company in the fruit and vegetable sector that needed financing for two key priorities: upgrading part of its machinery and securing supplies for its upcoming season.
The solution came from an asset that had been on its balance sheet for years: a solar photovoltaic installation that generated energy and recurring revenue but had never previously been used as collateral to obtain financing.
Two Financial Needs Affecting Cash Flow
The company’s business is highly seasonal. To ensure year-round supply, it imports seasonal fruit from other continents. This requires advance payments and ties up working capital months before the sales generated during the season translate into revenue.
Alongside these working capital requirements, the company was planning to invest in machinery to improve its production capacity.
The challenge was to address both needs without compromising the liquidity required for day-to-day operations.
The Financial Value of a Rooftop Asset
When analysing the company’s balance sheet, we identified a photovoltaic installation located on its own premises.
Part of the energy generated was used for self-consumption, while the surplus was sold under energy sales agreements that had been in place for several years. The company therefore had a proven track record of recurring revenue that could be demonstrated to a financial institution.
The opportunity lay in unlocking the value of both the installation itself and the revenue it generated.
A Financing Operation with a Traditional Bank
Based on this analysis, we structured a long-term loan with a traditional bank, using the photovoltaic installation and its energy sales agreements as collateral.
Our work focused on clearly presenting the elements supporting the transaction: the value of the asset, its historical revenue and the intended use of the funds.
The financing obtained enabled the company to cover part of its machinery investment and the purchase of imported fruit for the upcoming season.
The Result: Growth Without Putting Pressure on Cash Flow
- Collateral based on an existing asset: 100% of the transaction’s collateral was backed by the photovoltaic installation and its energy sales agreements.
- Fully long-term financing: a repayment schedule that provided the flexibility needed to meet both investment and seasonal working capital requirements.
- Two financing needs addressed through a single transaction: part of the capital expenditure (CAPEX) on machinery and the purchase of imported fruit.
What Financing Opportunities Could Be Hidden in Your Balance Sheet?
This case highlights the importance of assessing a company’s assets not only for their operational value, but also for their potential to support financing.
A photovoltaic installation, a piece of machinery or a contract generating recurring revenue can open up new financing opportunities, provided its value and characteristics meet the requirements of the financial institution.
At Kaizen Consulting, we analyse each case individually to identify a financing structure tailored to the company’s specific needs.
Do you need financing for new investments or to prepare for your next season? Tell us about your project.
