Funds frozen in invoices, and costs are piling up? Discover factoring for the packaging industry and finance production before the autumn peak
For the packaging industry – from corrugated cardboard, through foils and polymers, to glass packaging and labels – the end of summer is the last call to stock up warehouses and prepare technological lines for an intensive autumn. However, entrepreneurs face the ruthless mathematics of the supply chain: payment for raw materials, energy, and labor cannot wait, and payments from large recipients will actually hit the account after the season ends. How to manage working capital in this crucial period so as not to suffocate in terms of liquidity while chasing numerous orders? Factoring for companies in the packaging industry comes to the rescue.
Key takeaways:
- Preparation for the Q4 peak generates a noticeable liquidity gap: purchasing tons of raw materials in August and September requires immediate involvement of working capital, while clients from the FMCG, e-commerce, or retail sectors impose 60-, 90-, or even 120-day payment terms.
- Pre-financing of orders “reverses” the rules of the game, allowing the financing of invoices from raw material suppliers (e.g., paper mills or chemical concerns) and enabling the packaging manufacturer to pay off the liability in a timeframe tailored to the real cash rotation cycle.
- Flexible factoring for industry does not burden the balance sheet – unlike a bank loan, modern factoring for companies does not require hard collateral on fixed assets (machinery or real estate) and is fully resistant to natural, seasonal fluctuations in turnover.
Late summer in the packaging industry: the calm before the storm
Nearly 1.4 billion parcels, 74.3% of the postal services market value – this is what the courier delivery segment looked like in 2025, which has been characterized for years by systematic growth in both volume and revenue, as confirmed by data from the Office of Electronic Communications. For the e-commerce sector, the time of highest turnover, literally and figuratively, falls in the fourth quarter. According to Poczta Polska, in December, during the so-called peak parcel period, the average weekly number of shipments was 26.3% higher than the average weekly number from November, and it exceeded the weekly average from the previous 11 months by 47.6%.
For manufacturers, this means one thing: production halls must operate at maximum capacity from September, which requires conducting a supplier audit and securing raw materials as early as August. Here, however, a structural problem of payment bottlenecks and the dictate of deadlines arises. Base raw material suppliers – large paper mills, granulate producers, or steelworks – operate on the global market and require prepayments, cash payments on delivery, or very short, 7–14-day settlement terms. On the other hand, recipients of finished packaging – large retail chains, distribution centers, or international concerns – expect payment terms reaching 60, 90, and sometimes even 120 days.
How does a payment gap arise? Let's look at specific numbers
Imagine the harsh financial realities of a medium-sized plant producing cardboard packaging:
- To fulfill an autumn contract, the company must purchase 200 tons of specialized cardboard worth PLN 700,000. The supplier requires payment within 14 days.
- On top of this are fixed operating costs: electricity, transport, and shift-by-shift remuneration, consuming another PLN 180,000.
- In total, the company has to lay out PLN 880,000 in cash at the turn of August and September.
- The finished goods leave the warehouse in October, but with a 90-day term on the sales invoice, the real transfer from the retail chain will not hit the account until January.
For almost 4 months, nearly a million zlotys remains frozen in a single contract. On the scale of the entire company, this phenomenon creates a massive payment bottleneck. According to data from the Credit Information Bureau (BIK), delayed transfers affect as many as 87% of companies in Poland, and the average waiting time for receivables in the industry is constantly lengthening. In this situation, relying solely on one’s own cash reserves is a straight path to a loss of liquidity.
Pre-financing of orders – a way to improve financial liquidity
The answer to the pressure from raw material suppliers can be the pre-financing of orders (contracts). This is a flexible product designed specifically for companies that need to finance the purchase of raw materials before they produce packaging and issue their own invoices.
The mechanism of action of such a tool in the packaging industry is very transparent:
- You secure a contract. Your recipient (e.g., a retail chain or an FMCG manufacturer) places a large order for the production of a batch of packaging.
- The factor pays an advance. Based on this order, Ifis Finance pays you an advance towards invoices that will be created in the future. Such an advance can reach 25-30% of the entire contract’s value.
- You buy the raw material on time. You use the cash obtained in advance to finance the purchase of necessary materials – cardboard, polymers, or cellulose. Your supplier receives payment on time, which guarantees the smooth execution of deliveries.
- You settle the contract. After the production is finished, the packaging is delivered, and the final sales invoice is issued, the previously granted advance is settled.
– Suppliers of granulate or cellulose can be inflexible – lack of payment on time means withholding deliveries and downtime of production lines. Therefore, in the modern packaging industry, the winner is not the one who has the largest machinery park, but the one who can maintain liquidity and continuity of raw material supplies during the peak season – emphasizes Leopold Kasjaniuk, General Manager at Ifis Finance. – Professional factoring for industry, supplemented by pre-financing of contracts, acts as a financial cushion: it relieves the financial director of the stress associated with the weekly balancing of transfers and allows buying raw materials when they are needed, and not only when overdue payments from clients flow in – he adds.
Two sides of the equation: comprehensive factoring for companies in the production cycle
Securing raw materials is half the battle. The other half of the challenge appears when the finished cartons, foils, or labels roll off the production line and go to the final customer. You issue an invoice for several hundred thousand zlotys, but your recipient – a large retail chain – has 60 days to pay, and in practice often drags out the payment by another 2 weeks.
This is where classic factoring for companies (receivables factoring) comes in handy. Instead of waiting months for payment from the client, you assign the receivables and transfer the issued sales invoice for financing. The factor pays you an advance (usually from 80% to 100% of the gross invoice value) even within 24 hours of issuing the document.
For manufacturing enterprises, the most effective model is a combination of both tools. Factoring for industry in a holistic approach covers both settling liabilities towards suppliers (e.g., through pre-financing of orders) and financing recipients (receivables factoring – with recourse or non-recourse, where the factor takes on the risk of the contractor’s insolvency). In this way, the company closes the entire cash cycle: it does not engage its own capital in the purchase of raw materials and does not freeze receivables in sales invoices.
Why is it worth choosing factoring for industry from Ifis Finance?
Many owners of manufacturing companies first look for support in commercial banks. In confrontation with the specifics of the packaging industry, however, a bank working capital loan or an overdraft facility often turn out to be inflexible and risky solutions. Why?
- Bank procedures are based on rigid algorithms that often do not understand the specifics of pre-season stocking. The increased demand for cash in August is sometimes interpreted as a deterioration in liquidity ratios.
- Banks commonly require the establishment of a mortgage on the company’s real estate, a registered pledge on production machinery, or access to a current account.
- Traditional institutions often impose minimum credit engagement thresholds, which in industries with clear seasonality ends with the calculation of additional commissions and penalties in weaker months (e.g., in the middle of the year).
At Ifis Finance, we focus on a relational, boutique approach to business. Our factoring for companies is created by practitioners with many years of experience, we do not use automated scoring systems – each transaction is assessed by our analyst in cooperation with your individual account manager.
– It is worth emphasizing in all this that as a company belonging to the stable Italian capital group Banca Ifis, we give entrepreneurs 100% certainty of the disbursement of funds – regardless of turbulence on the interbank market – concludes Leopold Kasjaniuk.
Frequently asked questions (FAQ) about factoring in the packaging industry
How does factoring for industry take into account seasonality in packaging production?
Unlike many financial institutions, Ifis Finance does not impose rigid turnover limits and does not apply penalties for a drop in limit utilization in off-season months. If, after an intensive fourth quarter, your production naturally slows down in the first months of the new year, you do not incur any additional fees or sanctions on this account.
Does the implementation of factoring require hard collateral on machinery or a mortgage?
No. At Ifis Finance, we do not require the establishment of mortgages on real estate or pledges on production machinery. The standard collateral is the assignment of receivables from the invoice and a blank promissory note with a promissory note declaration. We also do not require opening a new bank account or granting powers of attorney to accounts in other banks.
How quickly can you launch raw material financing before the Q4 peak?
Thanks to a departure from rigid scoring procedures in favor of individual business analysis, the process of launching factoring at Ifis Finance is maximally simplified. After providing basic registration and financial documents and analyzing the portfolio of suppliers or recipients, the decision to launch a financing limit is usually made within a few business days, which allows you to react instantly to pre-season purchasing opportunities.
