Beyond the Bank: Non-Traditional Lenders Every CPG Brand Should Know About
Key Takeaways
CDFIs offer mission-driven, non-dilutive funding with added support services, but founders must meet strict eligibility criteria and may face lower loan caps.
CPG-focused credit cards like Parker and Ramp provide flexible, non-equity financing with terms aligned to inventory cycles and business growth, often bypassing personal credit checks.
Revenue-based financing gives brands fast access to capital in exchange for a percentage of future sales, but can quickly strain cash flow due to high effective APRs and stacking advances.
Local and niche programs — including agricultural associations and BIPOC initiatives — often provide founder-aligned capital with lower barriers and hybrid grant-loan structures.
When it comes to funding, CPG founders often find themselves between a rock and a hard place. They don't qualify for bank loans, but they're not ready for venture capital, making it difficult to support brand growth. If that describes your business, I'm here with good news. Today's funding landscape is broader than ever, so non-traditional lenders in CPG are offering inventory-backed financing, mission-aligned loans, and cash advances based on revenue.
In all the time I've been helping emerging CPG brands grow, there's never been a better time to look for funding. Alternative funding isn't just a last resort; it's a smart way to augment your capital mix — but you need to understand the costs and conditions associated with tapping into these funding sources. I created a clear breakdown to help you understand when each one makes sense for your business.
CDFIs: Community-Backed Capital With a Mission
One of the biggest sources of alternative funding for CPG brands is a community development financial institution. A CDFI is different from a bank because its mission is to serve communities that are often turned away by traditional lenders. In addition to funding, a CDFI might offer business coaching, financial education, or loans with favorable interest rates.
CDFIs are best suited for founders who operate in low-income communities or come from underserved backgrounds. For example, some institutions focus on strengthening rural communities or lending to business owners with Native American backgrounds. CDFIs also work with small businesses and individuals who don't qualify for loans from traditional banks.
Pros of CDFIs for food entrepreneurs include competitive rates, mission-driven support, and the opportunity to keep funds in the local community. One of the major drawbacks of using a CDFI is that they typically offer smaller loans. For example, there are programs with loan caps as low as $2,500, which may not meet your brand's funding needs. CDFIs also require more paperwork to help prove that you meet the organization's lending criteria.
Overall, CDFIs offer mission-driven capital that doesn't dilute your equity, making them one of the best non-traditional lenders for CPG brands. These are just a few examples of reputable CDFIs:
Although some lenders have low limits, typical loan amounts range from $50,000 to $500,000. You can use CDFI funds as working capital, to purchase new equipment, pay for technical assistance, or cover other approved expenses. Lending requirements vary, but common approval criteria include good personal credit, a realistic business plan, and an established presence in the target community.
CPG-Focused Credit Cards: New Tools for Building Emerging Brands
CPG-focused credit cards are one of the best non-dilutive capital options available, as they're tailored to the needs of early-stage consumer brands. For example, there are cards available to fit your inventory cycle, cash-flow patterns, and marketing needs — making them strategic tools, not just something you use when you need to float some expenses.
Parker, Flex, and Ramp are just a few of the options available to companies in the CPG industry. Unlike traditional credit cards, these platforms give you access to extended payment terms, integrated financial tools, and category-based rewards. For example, instead of saving a few cents on gasoline, you might earn rewards based on your shipping or ad spend.
CPG-focused credit cards are built with founders in mind. The underwriting process typically considers your company's revenue instead of your personal credit, and each platform makes it easy to track margins and unit economics.
Here's a quick look at how two of these platforms — Parker and Ramp — compare:
Eligibility: Parker expects consistent revenue — the more you generate per month, the better. You also need to have a registered U.S. business and a U.S. bank account. Ramp requires you to have at least $25,000 in a U.S. business bank account. You also need a registered U.S. business, such as a limited liability company (LLC) or S-corporation. Parker has a slight advantage over Ramp, as it doesn't have a minimum cash requirement.
Payment flexibility: Parker offers 90-day rolling terms, while Ramp provides bill pay term extensions when you need them. In this category, Parker has a slight edge, as you qualify for a 90-day rolling term without having to contact the support team or fill out any forms.
Use cases: Parker is ideal for CPG brands that can support strong revenue growth, as your limit increases along with your revenue. Ramp is ideal for start-ups and mid-size CPG brands that need robust reporting options and built-in spending controls.
No matter which card you choose, you can use it to pay for advertising, cover gaps in cash flow, or purchase inventory. Due to their flexible payment terms and built-in business tools, CPG-focused credit cards are ideal for supporting operations.
Revenue-Based Financing: Funding That Grows with You
Revenue-based financing gives brands access to capital in exchange for a cut of their future revenue. Here's how it works:
You find a lender and fill out an application.
The lender gives you a fixed advance, such as $5,000 or $10,000.
You repay the advance as a percentage of your top-line sales.
Consumer brands can use this simple process to buy inventory, fund ad spend, or bridge short-term cash gaps, so it's ideal for start-ups. The appeal of revenue-based financing is clear — you get quick access to cash without diluting your equity.
Quick cash comes at a cost, though. Your effective APR is likely to be high, and you also have to commit a percentage of your future revenue before you even earn it. If you take out multiple advances, repayments can take a serious bite out of your cash flow.
Wayflyer is just one of the platforms doing this type of lending. You can even use the online calculator to estimate how much funding you might receive based on your revenue. For example, monthly revenue of $10,000 may qualify you for an advance of $15,000 to $30,000, assuming you meet Wayflyer's requirements.
Inventory-Backed Lending: Turn Your Product Into Collateral
If fintech loans for consumer brands aren't a good fit for your company, consider inventory-backed lending instead. This lending option allows you to borrow against the goods you already own, freeing up cash for other purposes. Generally, you need to show lenders that you have valuable inventory, clean books, and a track record of selling through.
Inventory-backed lending is ideal for buying raw materials, covering production costs, or bridging cash gaps while you wait for receivables to come in. Popular platforms include Settle and Kickfurther. Settle offers structured loans, which are tied to your receivables or purchase orders.
In contrast, Kickfurther uses crowdfunding to raise money. After raising funds, you repay your backers with the money you get from selling your inventory. Think of it as Kickstarter for emerging brands.
The major risk of using inventory-backed financing is that you might end up with unsold stock or compressed margins. I'd also advise you to avoid overleveraging; you may end up borrowing more than your current operations can support.
Local and Niche Programs: Funding That Knows Your Space
I've already covered some of the national funding platforms, but not all non-traditional lenders in CPG are large companies. Many founders overlook local or niche programs, some of which have looser lending requirements than other lenders. Examples include winery associations, farm associations, state economic developments, and food incubators.
Don't forget to search for initiatives designed for BIPOC and women founders. If you belong to an underserved group, you may qualify for low rates, flexible repayment terms, and other benefits. Some programs even blend grants with loans, so it's possible to obtain financing without having to repay the entire amount.
Prepare for local and niche opportunities by creating a pitch deck, getting your books in order, and documenting proof of your company's impact on the local community. Steward and Walden Mutual are just two of the mission-focused lenders operating in the CPG space.
If you're interested in this approach, I highly recommend that you start close to home. Look for industry associations, agricultural groups, and agencies dedicated to promoting small-business growth. Many organizations have impact reporting requirements, but that's a small price to pay for financing that doesn't come with predatory terms.
Smart Capital Is About Fit, Not Just Funds
There's more capital out there than you think, but each source comes with strings. That's why the goal isn't to focus on money at the exclusion of everything else. I encourage you to choose a lender that fits your growth plan, margins, and values.
Think carefully about what kind of capital you really need, what you can sustain, and what aligns best with your mission and business model. Contact Balanced Business Group for help evaluating capital options, preparing lender-ready financials, and structuring smart repayment plans.
