A miller or miller loan is a loan requested by a baker from a miller in return for a supply commitment. It is a common practice to supplement his personal contributions for the opening of a bakery. Indeed, the milling loan makes it possible to satisfy some of the financial needs of the baker specified in the financing plan.
The advantages of the milling loan
The miller loan offers many benefits for both parties. And for good reason, the partnership established between the baker and the miller makes it possible to develop the whole of the sector. On the one hand, for the miller, the goal is to build customer loyalty. In addition, the regular supply of bakers is a safe value for the flow and production of flour. On the other hand, the baker also finds his account by having a financing for his installation. Especially since the artisanal bakery is among the sectors of activity most consuming flour.
Good to know :
Although the milling loan brings benefits to both parties, the exclusivity conditions that it implies may deprive the baker of a freedom to manage his flour stocks.
Miller Loan: Supply Commitment
In exchange for the help of the miller, the baker undertakes to buy only from the mill.
Assistance in the form of a cash advance
As mentioned above, the creation of a bakery requires a considerable amount (about 150 000 $). To hope for a bank loan, it is necessary to make a personal contribution of 25 to 30% of the financing need. In addition, the valuation of a business for a bakery is of the order of 50 to 120% of its annual turnover. Also, mills can give the baker a cash advance to finance the acquisition of a business bakery and help them settle.
Aid in the form of flour reserves
The flour mill offers the baker to install a room in his home to stock flour. This also allows the miller to optimize his costs. In addition, the mill can also support the equipment necessary for the installation of the flour chamber.
Bonding of the bank loan by the miller
No one knows, banks are applying more and more hardening measures for the granting of loans to professionals. Even more so because artisans do not usually have reliable financial support. Also, for the loan of financing the installation of a bakery, the miller can endorse the engagements subscribed by the baker with the financial organizations. Thus, the banks grant him more easily their trusts for the granting of a loan.