Inventory Finance
Bakery doubles output with Inventory Finance
Background
A family-owned bakery in Johannesburg was gaining popularity in its community, but the owners faced a recurring problem: they didn’t have enough cash on hand to buy ingredients in bulk. With daily sales growing, running out of flour, sugar, and packaging was a constant risk. Buying smaller quantities at retail prices also meant higher costs and lower margins.
The Challenge
- High demand, but limited working capital
- Reliance on expensive, small-quantity purchases
- Interruptions in production whenever stock ran low
The NiyaPay Solution
NiyaPay stepped in with an Inventory Purchase Finance facility. The bakery’s supplier was paid directly, enabling the business to secure three months’ worth of flour, sugar, and packaging upfront. The financing was structured as a Murabaha (cost-plus) contract with a fixed, pre-agreed profit margin. Repayments were scheduled over 90 days, aligned with actual sales flow.
Results
- Sales doubled within three months due to uninterrupted production.
- The bakery accessed bulk discounts, reducing cost per unit and improving profitability.
- Cashflow stress eased, allowing the owners to focus on operations and growth.
Outcome: consistent stock, higher sales, and healthier margins — all without pressure on working capital.