The retail chain dictates tough terms, and suppliers expect money “ASAP”. How to make ends meet? FMCG factoring in practice

September is a time of intensive preparation for autumn-winter sales peaks for food producers and FMCG sector companies. Signing a long-term contract with a large retail chain is undoubtedly a reason for an entrepreneur to rejoice and secures a large volume, although sometimes it is also the beginning of… liquidity challenges. Retail market giants usually impose long invoice terms, and widespread payment bottlenecks are a sad daily reality of the market. On the other side of the supply chain stand employees, farmers, packaging producers, or transport companies to whom the company has its own liabilities. How to effectively manage liquidity when pressure comes from both sides? The answer to this market challenge can be professional factoring for FMCG companies.

Key takeaways:

• Cooperation with strong retail chains and discounters often means having to freeze the company’s working capital for up to several months, which in an era of rising operational costs is quite a burden for food suppliers and producers.
• FMCG factoring eliminates the risk of payment bottlenecks from clients, providing the funds necessary to pay taxes, salaries, and fixed costs practically on the spot.
• Thanks to support from the Supplier Financing Program, a company can settle its own liabilities to farmers or raw material suppliers on time, while negotiating favorable discounts.

The FMCG industry, particularly food production and processing, is currently in a difficult position. On the one hand, geopolitical tensions, e.g., in the Middle East, directly hit the raw materials market, inevitably driving up production costs. Added to this is increasingly expensive logistics – fueled by higher fuel prices and difficulties on key shipping routes. The picture is completed by rising labor costs. The August salary report in the industrial sector by Grafton Recruitment Poland exposes a deficit of qualified specialists in the FMCG sector, from automation engineers to quality engineers and technologists. The need to retain workers at production lines exerts strong wage pressure.

On the other side of the supply chain stand powerful buyers, creating an obvious asymmetry of power. A brutal price war is taking place on the Polish market, in which the main roles are played by the largest discounters, such as Lidl and Biedronka, which already control nearly 44% of the domestic FMCG market combined. To maintain the image of the “cheapest store” and fight for market share without their own losses, chains pressure suppliers to finance promotions, effectively cutting their own margins. Furthermore, chains hold a strong bargaining chip in negotiations – private labels. According to The State of Grocery Retail Europe 2026 report, retailers, not producers, are now responsible for about 70% of food innovations in Europe.

Freeing up funds from your own sales is the first half of success. The second relies on efficiently managing liabilities towards farmers and suppliers of raw materials and semi-finished products that you need to manufacture your goods. Standardly, you settle these bills after 30 days, although the prospect of faster settlement of receivables in exchange for a discount (early payment discount) can be tempting. The savings are real, although, on the other hand, they require engaging your own working capital, which can disrupt liquidity.

Instead of engaging your own capital, you can use the Ifis Finance Supplier Financing Program. How does it work in practice? We – relying on the stable financial background of the Banca Ifis group – pay your contractors’ invoices right away. You, in turn, gain a strong argument to negotiate an attractive discount for early payment with them. Instead of standard fees, in this case, we propose an innovative and simple model of sharing the profit from the discount.

– For example: in exchange for faster payment, you negotiated a 2% discount with the supplier. We divide this generated profit on transparent terms, half and half. A portion of the discount thus covers the financing cost, and the other part goes straight into your pocket as pure savings. In this way, you become a reliable client for farmers and packaging suppliers who pays on time, and all this happens without engaging your financial surpluses. You can immediately allocate the saved funds to current operations, such as paying the salaries of key engineers – explains Leopold Kasjaniuk, General Manager at Ifis Finance.

When looking for support for your company, it is worth betting on a partner who looks at your business holistically. At Ifis Finance, we perfectly understand the specifics of the Polish food market. Our factoring for FMCG companies is not based on rigid banking algorithms. We make decisions based on a solid analysis of your relations with recipients.

– As part of the Banca Ifis capital group, we offer entrepreneurs the highest transaction security while maintaining a boutique approach. With us, the client has an assigned, dedicated account manager and a transparent contract with no hidden fee tables – emphasizes Leopold Kasjaniuk. – By combining standard receivables financing with the Supplier Financing Program, we create a protective shield for producers against payment bottlenecks. This allows them to confidently sit down to negotiations with the largest retail chains, without fear about company liquidity – he concludes.

It is an ideal solution for medium and larger processing plants (meat, dairy, fruit and vegetable), as well as sweets or beverage producers who cooperate with large discounters, supermarkets, and distribution centers, struggling with payment terms deferred by dozens of days.

Fundamentally yes, in the classic model of disclosed factoring, the debtor (retail chain) is informed about the transfer of receivables. It is true that many contracts with retail chains contain clauses about a strict ban on assignment (which under normal conditions makes it ineffective), however, as a supplier, it is worth knowing your rights. According to the Act on Counteracting Excessive Delays in Commercial Transactions, a contractual ban on the assignment of a pecuniary receivable becomes legally ineffective if three conditions are met cumulatively: the payment term on the invoice exceeds 60 days, the debtor is a large enterprise (e.g., a retail chain), and the creditor is an SME sector company and the invoice is not paid on time. This is a kind of legal shield that enables smaller suppliers free access to external financing.

When your contractor (e.g., a farmer supplying raw materials or a packaging producer) issues an invoice, Ifis Finance pays it almost immediately. Because the supplier receives cash on the spot, you gain an argument to negotiate a discount (so-called early payment discount). You, in turn, settle with us only after the standard or even extended payment term has passed. A portion of the profit generated in this way from the discount covers the cost of our service, and the remaining amount is your savings.