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b) Freshona is a gourmet fresh produce seller that operates in the Lancashire area. Until 2019 most of its customers were restaurants. The company would

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b) Freshona is a gourmet fresh produce seller that operates in the Lancashire area. Until 2019 most of its customers were restaurants. The company would deliver their products using a mini-van owned by Freshona. In 2020 during the several lockdowns experienced across the UK due to the Covid-19 pandemic, Freshona had to face a sudden drop in the demand for their products from restaurants and pubs and decided to innovate by opening an online store for retail customers (offering home delivery). The webpage became suddenly a great success with a large number of parcels of gourmet products ordered online. In November 2020, during the second wave of the pandemic in the UK and in the run-up to Christmas, Freshona is facing a demand that represents over 25 times the number of daily deliveries made before the lockdown and extends way beyond Lancashire area. The single mini-van that the company has been using is certainly not enough to fulfil the new demand. They urgently need to expand their delivery capacity. Freshona is a highly levered firm with a cost of capital very sensitive to its capital structure. The firm is reinvesting most of the cash generated to increase production, meaning the firm has very little cash available. REQUIRED: i. Assuming you are the financial manager of this firm, discuss the potential financial arrangements available to Freshona to fund the expansion of the delivery capacity of the firm as soon as possible. Explain in detail the potential advantages and disadvantages of your proposal

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