Finding a lending provider that truly understood the CPG industry made all the difference.
Austin, Texas-based NadaMoo has been making organic dairy-free coconut milk ice cream since it was founded in 2004. When the company recently found itself needing more working capital to support its growth, it decided to pursue a line of credit while beginning to work on a longer-term equity raise.
“We thought that a credit facility would be the perfect way to have access to the capital that we needed to keep everything in stride within our operation, while keeping our business structure and cap table simplified during our equity raise transaction,” said NadaMoo CEO Daniel Nicholson.
NadaMoo first talked with traditional credit providers including large national banks as well as local and regional banks. The company discovered a time-consuming and cumbersome loan application process that wasn’t compatible with the priorities of an independent and quickly growing consumer product business.
“The amount of information and other requirements they were asking for, it was just a little too intensive, particularly for the short-time needs we had,” Nicholson says. “We knew we were looking for more of a temporary credit line setup for our longer-term runway towards an equity raise. We weren’t keen on going through that whole process for what wasn’t meant to be a long-standing facility.”
The right product at the right price
Nicholson advises other companies that are exploring credit and equity options to consider their specific needs. “If entrepreneurs are experiencing very high growth, I think debt facilities can be a great way to really increase the value of their company without having to give up a chunk of equity sooner than they’d like to,” he says. “For this instance, the quick and short credit line worked perfectly for what we were looking for at the time.”
That’s why it’s important to work with a lender that truly understands the business at hand, and knows when credit is the right product for you.
“One thing that really impressed us with CircleUp is how they provided completely appropriate terms relative to our business,” Nicholson says. “They had a much deeper understanding of CPG financials — chargebacks, deductions, promotional allowances, how all that affects what you receive in your accounts receivables — and that gave us more confidence when making use of the credit line that CircleUp extended. They were smart, and it made us that much more comfortable.”
A process that respects your time
When NadaMoo was introduced to CircleUp Credit Advisors, it was a breath of fresh air.
“When we talked to CircleUp, we found a process that was much easier and more streamlined,” Nicholson says. “They had a better understanding right off the bat of how money flows in CPG.” Because of CircleUp’s years of expertise in the CPG space, NadaMoo didn’t need to spend extra time educating CircleUp Credit Advisors about how its business was structured, and could instead get right into discussing more relevant specifics.
CircleUp Credit Advisors quickly extended a line of credit tailored to NadaMoo’s needs, providing crucial fuel for growth that was remarkably easy for the company to manage.
“It was really the perfect finance tool for us. It was seamless, and it allowed us to really stay in stride and continue growing our operation during our capital raise without much worry,” Nicholson says. “As our accounts receivables were flowing in, our line of credit was getting paid down very quickly. We knew we could always count on CircleUp to understand our business and extend more credit if we needed it.”
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